US August personal consumption expenditures increase 3.6% YOY, implies better Q3 GDP

US personal consumption expenditures account for about two thirds of GDP, so it's the most important part of the economy. August personal consumption expenditures YOY growth rate is 3.6%, which maintains good trend (Fig. 1). Please note that personal consumption expenditures growth rate is in nominal dollar, so not directly comparable with headline real GDP growth rate.

However personal consumption expenditures growth rate in Fig 1 can be compared with nominal GDP growth rate, and it's a very meaningful comparison. Fig. 2 shows the comparison. It's clear that both growth rates have very good correlation. It's also noticeable that personal consumption expenditures growth rate decouples GDP growth rate lately, which implies that Q3 GDP growth rate may pick up, to make up the divergence.

 

Figure 1 personal consumption expenditures growth rate (YOY)

 

Figure 2 personal consumption expenditures YOY growth rate (in blue)

and nominal GDP YOY growth rate (in green)