Consumer spending is the total expenditure of the country's population on long-term, everyday goods and services, taken into account in the current prices of a specific calendar period.
The task of state statistics is to accurately determine the level, dynamics and understand the structure of public spending. At the same time, economists do not have the task of understanding the share of national or imported consumption, as well as tracking inflation, so calculations are carried out at prices valid for this period.
The share of expenses attributed to household income will indicate:
- Purchasing opportunities and confidence in the future
- Adequacy of satisfaction of the population's requests (payment demand) by the market of goods and services
To assess socio-economic policy, statistics take into account expenditures by demographic and social groups, households with different levels of income.
The Consumer Spending indicator contains the average level of consumer spending per capita or household. The resulting costs are displayed in the consumer personal spending index, which is the benchmark for the national of the Central Bank when determining the degree of future "inflationary pressure", along with the dynamics of other macroeconomic indicators.
Consumer spending index in developed countries
Consumer spending is determined by several types of macroeconomic indicators. The most important of them for the market Forex is an index of personal expenses.
- The index of personal consumption expenditures in the United States is published monthly and annually, statistics also apply the basic index, without taking into account spending on seasonal and systemic factors – energy carriers, some products and services.
The indicator is released at 12: 30 GMT at the end of the month. Statistics publish two values-preliminary and updated indicators.
- The index of personal expenses of the EU is determined based on one household – the average family according to an average sample of the total expenses of all people for necessary goods and services consumed
The impact of the consumer spending indicator on financial and foreign exchange markets
Consumer Spending is published in all developed countries in the form of dynamics of changes to the previous period-month, quarter and year, expressed as a percentage. The indicator has a short-term impact on the national currency and a long-term impact on the "local" stock market. The reflection of data on global exchange instruments is determined by the significance and share of a country's GDP in the global economy.
Thus, investors are constantly paying attention to the output of Consumer Spending: USA, The Eurozone, Japan and China.
Before publishing in economic calendar past data and forecasts of analysts for the current period are available to trading participants.
The short-term reaction of the markets is determined by the degree of discrepancy between real and forecast expenditure indicators:
- In the positive direction – the strengthening of the national currency
- Less than analysts ' expectations-a drop
Investors take into account trends of these indicators, the increase of which indicates an increased amount of income, confirming the figures for employment of the population or an increase in wages. The indicator also signals that the population assesses the current and future situation as stable.
Shares of companies are growing on this factor, investors assume an increase in business activity and, as a result, profits and dividends. The absence of changes indicates a possible stagnation in the economy, and the fall confirms the crisis phenomena.
Spending of the country's population on the wave of steady growth of macroeconomic indicators can accelerate inflation and continue the process of rate growth that has already begun. Under such aggregate conditions, the national currency may fall at each new round of their growth, in anticipation of a tightening of monetary policy and the adoption of measures by the state to "cool" the economy.