As income increases, total consumption decreases. The decomposed consumption patterns suggest that tariff-induced frontloading promoted some of the support for December consumption.
Figure 1: Personal consumption expenditure (black, log scale on left), income exemption rate transfer (red, log scale on right), both Bn.Ch.2017 $SAAR. Source: BEA.
Figure 2: Durable goods (blue, left log scale), bn.ch.2017 $saar, personal consumption expenditures for both Durable goods (blue, left log scale), non-toxicity and service consumption total (right log scale). Source: BEA.
Flat service and non-toxic consumption suggest (i) a reduction in perceived permanent income (as defined by Friedman) and (ii) an increasing uncertainty. However, we emphasize service/non-durability as uncertainty may have less impact on services and non-durability than durable goods.
