What's Going on with the American Consumer?

Much stronger than expected payroll growth, rising wages, and an unemployment rate close to the Fed's estimate of the longer-run normal rate. With that as a backdrop, you'd expect the American consumer to thrive. But this is not the case, with the latest spending data essentially flat. Worse still were the falls in major discretionary areas (Leisure, clothing, electronics, dining, travel), indicating Americans are only spending on essentials. Something doesn't add up, though the answer likely has much to do with the age brackets of whose been getting jobs lately. After all, in the last year - 117,000 jobs were added in the 35-44yr bracket - 67,000 jobs were lost in the 45-54yr bracket So the age brackets that do the most spending have seen minimal job growth, whilst they've also suffered huge falls in their net worth (see images) post GFC. To draw a (bad) sporting analogy, expecting the American consumer to lift is like expecting the Cavs to win without LeBron or Delly. It's no wonder spending numbers are still soft despite the job growth (VIEW LINK)