Chart of the Day: this is the US economy’s biggest vulnerability
Rising oil prices, coming amid low nominal wage growth, is a big problem for US consumer demand
As Asia Unhedged noted yesterday, consumer demand remains questionable given low nominal wage growth and rising oil prices. The chart above shows the inverse relationship between the price of oil and real personal consumption expenditures, which measures price changes in consumer goods and services.
In line with this, a distinct trade-off between consumer staples stocks and energy stocks can be seen in the chart below.