New Deal democrat’s Weekly Indicators: Simply Stellar Consumer Spending June 29 – July 4

Weekly Indicators: Still Strong Spending, Tepid Tax Payments

Two cross-currents I mentioned in my long piece Friday were very much in evidence in the high frequency data this week: huge gains in aggregate YoY consumer spending, and very weak withholding tax collections. My take on this is that the top end of the income distribution is doing very well, thank you, while the lower levels are struggling.

• All time frames remain positive, with long leading, short leading, and coincident indicators signaling continued economic strength.

• Yield spreads and booming corporate profits are key long leading positives, while the leverage index signals tightening credit as a notable negative.

• Short leading indicators are buoyed by strong stock prices, rebounding regional Fed indexes, and very low jobless claims.

• Coincident data shows robust consumer spending, though tax withholding remains weak, warranting close monitoring.