This morning we learned that Real Disposable Personal Income rose at the fastest month-over-month rate since April 2015, up 0.6 percent.

Looking at a year-over-year basis, real Disposable Personal Income rose at the fastest rate since October 2016. That growth in income however, didn’t translate into spending with Personal Consumption Expenditures nearly flat, with an increase of just 0.055 percent on a month-over-month basis.

On a year-over-year basis, May’s spending was up 4.2 percent, although the rate of increase has been slowing since March.

Rising income levels are supported as well by recent comments we’ve seen.

“Labor, we continue to see some pretty good inflationary pressure…there’s 3% to 4% wage inflation in our labor number, right now; we’re able to offset some of that with productivity enhancements. But labor continues to be something that we’re focused on” —Darden CEO Gene Lee (Restaurants)

This is consistent with the Consumer Confidence data we’ve been seeing that show strong sentiment for current conditions, but expectations have been trending down significantly. Folks feel pretty good about their situation today, which makes sense if incomes are rising at a faster rather, but aren’t too confident in the future, which would reasonably result in less spending and more saving.

Looking at federal tax receipts gives us a different image and shows an economy in no way accelerating, which is consistent with much of the data we have been discussing recently, but contrasts with today’s income data. In fact, individual income taxes on are track to drop by 0.2 percent of GDP this year.

Back to the positive side, the recent Cass Freight Index Report gives us cause for optimism. Cass shows that both Shipment and Expenditures have been positive for five consecutive months and even more importantly, look to be accelerating. This index had been in negative territory for 20 months, breaking out back in last October, making it one of the first indicators that a recovery in freight had begun.