Real personal spending in the US fell three times more than expected last month, data out Friday showed.

The figures, released as they were a day after the advance read on Q4 GDP, were perhaps amenable to the “stale” treatment from traders, but nevertheless, the more granular look at the state of the American consumer in December was incrementally useful for refining various macro narratives.

The headline personal spending print showed a 0.2% decline, in line with expectations, but real spending fell 0.3% against forecasts for a negligible drop.

Nominal goods spending declined sharply last month led, unsurprisingly, by gas. The drop in goods spending was only partially offset by services spending, where the increase was driven by housing, air fares and health care.

I doubt any of that will come as a surprise. December’s retail sales report was lackluster and the personal consumption component in the GDP report missed estimates by a fairly wide margin. Do note that real spending for November was revised lower which, when taken with the below-consensus print for December, evidenced a weary consumer.

The PCE price gauges were mostly in line for last month. The critical MoM core print was an as-expected 0.3%.

The headline gauge ticked 0.1% higher from November. Consensus expected no change.

The Fed needs the sequential prints to average 0.3% or, ideally, lower. If those pick back up, it’ll mean market pricing for rate cuts in the back half of 2023 will be forced to “true up” to the median dot and to Fed rhetoric, which continues to hew closely to a narrative that says “No cuts for you!” until at least 2024.

Services prices moved 0.5% higher from the prior month, while goods prices dropped. As a reminder that nobody needs: Services is where the “sticky” inflation is, and it’s also where the wage-price spiral will manifest. On the bright side for the Fed, inflation-adjusted services spending was flat last month for the first time in almost a year. Critical ECI data for Q4 is due next week.

The 12-month readings on headline and core PCE prices were 5% and 4.4%, respectively.

Both were consistent with consensus, but still wholly inconsistent with the Fed’s target. The optimists among you will exclaim, “We’re getting there!”

The personal saving rate moved higher for a third month in December, Friday’s data showed, but at just 3.4%, it’s still near record lows.

All in all, the data painted a picture of an economy that’s still struggling with elevated price growth and a consumer who’s inflation-weary and perhaps closer to the threshold beyond which “resilient” won’t work as an adjective anymore.

I’ll leave it to readers to determine whether the combination of slower price growth and bad spending news was enough to conjure a “good” news spin vis-à-vis monetary policy.