Personal Spending, Consumption
|Release Date:||Usually released monthly, about 30 days after the month under review ends|
|Release Time:||Usually at 9.30am US Eastern Time|
|Released By:||The US Bureau of Economic Analysis|
The Personal Spending report is a measure of the change in the inflation-adjusted value of all expenditures by consumers. Simply put, the personal spending report tracks how much the spending of consumers has changed between the last report and the present report. Since this data is issued monthly, it follows that the report release tracks the situation for the previous month.
It is also called the Consumer Spending or Personal Consumption Expenditures report, and is released by the US Bureau of Economic Analysis (BEA).
Time of Release
The Personal Spending report is usually released monthly, about 30 days after the month under review ends. The time of release is 9.30am US Eastern Time. The data is released at the same time as the Personal Income report, and is seen on this webpage of the US Bureau of Economic Analysis and also on independent news feeds from Bloomberg and Thomas Reuters.
However, the Personal Spending report carries more weight than the Personal Income report as far as its use for trading purposes and market analysis is concerned.
Interpreting the Data
There is a significance in the release of the Personal Spending report along with the Personal Income report. People tend to spend only out of what they make, so looking at personal incomes as well as personal expenditures gives a pattern as to the financial state of the consumers in a country. This will impact on the Retail Sales report for the next month. Usually, the Retail Sales report (which also covers consumer spending), is released about 2 weeks earlier, and this dampens the impact that the Personal Spending report has on the market, making it a moderate impact news release.
Spending by the consumers in a country will account for most of the overall economic activity in that country. This is why the US government gave tax rebates (some sent out as personal checks) to every citizen at the height of the economic crunch in 2008/2009 to get them to spend to stimulate economic activity. Without consumer spending, most retail businesses would fold, manufacturing would slow and jobs would be cut, leading to a vicious cycle that could cripple a nation’s economy.
Personal spending is therefore one of the most important gauges of economic health due to the vast ripple effect consumer buying creates in the economy.
If the actual reading is higher than the consensus figure, the result is seen as USD positive. A lower than expected figure is seen as USD negative.
While the Personal Spending report is not tradable on the charts because of its moderate market impact, it can be used as a leading indicator to predict the outcome of the Retail Sales reports as well as the manufacturing and employment data that will be released later in the month.