The document summarizes consumer economic trends in July 2016. Key points include: - Disposable income and consumer spending increased slightly in May and June while retail sales grew. - Strong job gains in June of 287,000 rebounded from a weak May, but broader employment ratios declined. - Consumer sentiment dipped in July due to Brexit and stock market concerns, while small business optimism increased modestly.

1. Consumer Economic Trends
July 2016 Chartbook
Chuck McKay
ckmckay@me.com

2. Consumer Economic Trends – July 2016
7/28/16 Consumer Economics Chartbook - CKMcKay 2
Summary
• The U.S. economy continues to be a bit tenuous and as such remains
highly susceptible to shocks: Brexit, political turmoil, terrorism, etc.
• During June disposable income was up 0.2% and average weekly
earnings increased 0.3%
• Consumer spending was up 0.4% in May, retail sales increased 0.6% in
June. Gasoline station sales are still a significate drag on the totals
• June job gains were strong at 287,000; a dramatic turnaround from
May’s abysmal 11K. However the broader employment ratios slid
during the second quarter
• Consumers revolving debt continued to increase but at a consistent
which kept the debt to income ration stable
• Preliminary July consumer sentiment dipped 4pts to 89.5 on Brexit
and stock market concerns. The Conference Board’s consumer
confidence index, measured after the stock market had recovered its
Brexit losses, was essentially unchanged from June
• Small business optimism has ticked up modestly over the second
quarter, but is still below its post recession high
List of Charts
1. Disposable income
2. Consumer spending
3. Retail sales
4. Ecommerce sales
5. Jobs growth vs. UI claims
6. Employment ratios
7. Wage growth vs. inflation
8. Revolving credit
9. Purchase volume
10. Consumer sentiment
11. Small business optimism

3. Annual disposable personal income annual growth slipped to 4.1% in May. The savings rate fell
similarly. Since the beginning of ‘14, disposable personal income has grown at a 4.0% annual rate
7/28/16 Consumer Economics Chartbook - CKMcKay 3
17.0%
17.5%
18.0%
18.5%
19.0%
19.5%
20.0%
20.5%
21.0%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16
Personal Income and Savings
Disposable Personal Income Y/Y Growth% Personal Savings Rate % Tax Burden % Personal Income (right scale)
Source: Bureau of Economic Analysis
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4. May consumer spending grew 0.4% and year-over-year growth 3.7%. Reported goods spending
growth was volatile in the first 5 months of ‘16 as the BEA seems to be struggling with its beginning of
the year seasonal adjustment factors
7/28/16 Consumer Economics Chartbook - CKMcKay 4
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
'11 '12 '13 '14 '15 '16
Nominal Consumer Spending Growth Y/Y%
Total Consumer
Spending
Durable Goods
Nondurable Goods
Services
Nondurable Goods
ex. Energy
Source: Bureau of Economic Analysis
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5. Retail sales gained 0.6% in June. Year-over-year growth increased to 2.7%. Gasoline station sales
grew 1.2% in June. The decline in gasoline station year-over-year sales remained better than -10%
7/28/16 Consumer Economics Chartbook - CKMcKay 5
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
'11 '12 '13 '14 '15 '16
Retail Sales Growth Y/Y%
Total Retail Sales Excluding Autos Ex. Autos & Gasoline Stations Gasoline Stations (right scale)
Source: Census Bureau
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6. During the last four quarters e-commerce contributed over 60% of retail sales growth…
falling gasoline sales has accelerated e-commerce’s growth impact
7/28/16 Consumer Economics Chartbook - CKMcKay 6
-45%
-30%
-15%
0%
15%
30%
45%
60%
75%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16
E-Commerce Sales Growth Y/Y%
Note: This chart is updated quarterly
Total Retail Sales E-commerce Total ex. E-commerce E-commerce Overall Growth Contribution 4QAverage (right scale)
Source: Census Bureau
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7. June jobs gains (287K) rebounded sharply from June’s disappointing 11K. Initial claims remain
historically low… 12 month average job gains (204K) edged back over 200K. May’s 199K 12 month
aveage broke the 200K+ streak that began in April ‘14
7/28/16 Consumer Economics Chartbook - CKMcKay 7
250
280
310
340
370
400
430
460
490
520
550
580
610
640
670
700-900
-800
-700
-600
-500
-400
-300
-200
-100
0
100
200
300
400
500
600
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16
Monthly Employment Gains vs. Unemployment Claims (Thousands)
Monthly Payroll EmploymentGains 4 Week Moving Average UnemploymentClaims (rightscale inverted)
Source: Bureau of Labor Statistics
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8. The broader employment ratios reversed Q1’s positive trend in Q2 as both the labor force
participation rate and the employment-population ratio fell
7/28/16 Consumer Economics Chartbook - CKMcKay 8
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
57%
58%
59%
60%
61%
62%
63%
64%
65%
66%
67%
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16
Employment Ratios
Labor Force Participation Rate Employment-Population Ratio UnemploymentRate (rightscale)
Source: Bureau of Labor Statistics
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9. Wage growth was up only 0.2% in June, however the y/y trend showed improvement during
2Q. June y/y wage growth was 2.6% equaling the post recession high
7/28/16 Consumer Economics Chartbook - CKMcKay 9
-1%
0%
1%
2%
3%
4%
'10 '11 '12 '13 '14 '15 '16
Wage Growth vs. Inflation
Average Hourly Earnings Y/Y Growth CPI Y/Y % Change Core CPI Y/Y % Change
Source: Bureau of Labor Statistics
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10. Revolving credit growth has accelerated since early ‘14; however, as a percentage of
disposable income revolving credit has remain stable at ~2ppt below its pre-recession level
7/28/16 Consumer Economics Chartbook - CKMcKay 10
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
$800
$825
$850
$875
$900
$925
$950
$975
$1,000
$1,025
$1,050
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16
Consumer Revolving Credit
Consumer
Revolving
Credit
Outstanding
Consumer
Revolving
CreditY/Y%
Growth (right
scale)
Consumer
Revolving
Creditas a % of
Disposible
Personal
Income (right
scale)
Source: Federal Reserve, Bureau of Economic Analysis
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Billions

11. Q2 payment card purchase volume year-over-year growth slid 1.4ppt to 7.9%
7/28/16 Consumer Economics Chartbook - CKMcKay 11
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
'08 '09 '10 '11 '12 '13 '14 '15 '16
Network Payment Card Purchase Volume Growth Y/Y%
Source: AXP, DFS, MA, V Company Reports
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12. The preliminary Consumer Sentiment index fell in large part due to economic concerns and
stock market losses (which have subsequently reversed) following the Brexit vote
7/28/16 Consumer Economics Chartbook - CKMcKay 12
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
40
50
60
70
80
90
100
110
120
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16
Consumer Sentiment
University of Michigan Consumer Sentiment Y/Y% Change (rightscale)
Source: University of Michigan
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13. Small business optimism declined 0.7ppt from June. The third consecutive monthly gain although the
six month moving average continued its downward trajectory since the index topped 100 in Dec. ‘14
7/20/16 Consumer Economics Chartbook - CKMcKay 13
80
85
90
95
100
105
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16
Small Business Optimism
NFIB Small Business Optimism Index 6 Month Moving Average
Source: National Federation of Independent Business
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