The Bureau of Economic Analysis estimate of personal income and outlays for December finds another increase exceeding $39 billion (0.2 percent) in Disposable Personal Income. The potential for continued strong consumer demand is mitigated by a 0.4 percent increase in the Personal Consumption Expenditure (PCE) price index. Inflation is playing its role. But, please see chart below, there are still about 500 billion more (chained 2012) dollars available to spend last month than in December 2019. Two Decembers ago, Americans spent $10,264 billion on services, $3044 billion on non-durable goods, and $1545 billion on durable goods. Last month’s expenditures were $10,759 billion on services, $3560 billion on non-durable goods, and $1988 billion on durable goods. Those proportional shifts in buying goods require similar shifts in supply chain operations. December’s level of demand is much better calibrated with supply capacity than demand expressed in the first quarter of 2021. But, still, fulfilling one-fifth to one-quarter more pull is non-trivial. It is — has been — really tough.
Related media coverage: Bloomberg, Financial Times, Wall Street Journal, and Reuters. Additional context on GDP growth and such here and here and here.