·
Personal consumption expenditures surged 1.1% last month after
an upwardly revised 0.4% rise. The November increase beat Consensus
expectations for a 0.7% rise. Adjusted for inflation spending rose
0.5% after the upwardly revised 0.1% uptick. Three month growth in
real spending rose to 3.4% (AR).
· Spending on discretionary items was firm led by a 1.8% (9.6% y/y) jump in real spending on household furniture & appliances. Spending on apparel also rose a firm 0.9% (5.6% y/y) but spending on motor vehicles fell 0.8% (+2.4% y/y). Spending on electricity surged 5.9% (6.9% y/y) but real spending on gasoline fell 0.3% (-0.6% y/y). Medical care spending rose 0.2% and spending on recreation fell 0.1%). Spending on food rose 0.7% (2.2% y/y). Real spending excluding food & energy rose 0.4% (3.2% y/y). These detailed spending figures are available in Haver's USNA database.
· The PCE chain price index surged 0.6%%, lifted by higher energy prices. The core PCE price index gained a steady 0.2% but y/y growth in core prices picked up further to 2.2%. Three month growth in core prices rose to 2.9% (AR) due to faster growth in services prices where the three month growth of 4.0% was the fastest since late 2005.
· Personal income during
November rose 0.4% and the gain fell just short of expectations for a
0.5% rise. The October increase was unrevised at 0.2%. Three month
growth in income was 4.2% (AR), its worst since June.
· Lower interest rates caused a shortfall in interest income of 0.4% (+6.2% y/y) which was the same decline as in October. Conversely, growth in dividend income held steady at 0.9% (12.6% y/y), the same as during the prior two months.
· Growth in wages & salaries picked back up to 0.6% (5.2% y/y) after an unchanged reading for October. Three month growth amounted to 5.3%. Factory sector wages rose 0.4% (2.2% y/y) after declining during the prior two months. Wage & salary income in the private service-producing industries rose 0.7% (6.1% y/y) after no change in October. Wages in the government sector again increased 0.4% (4.6% y/y).
· Personal current taxes rose a firm 0.7% (8.1% y/y) and that left disposable personal income to rise 0.3% (5.8% y/y). Adjusted for inflation disposable personal income fell 0.3% (+2.1% y/y) for the second month of decline. That left the three month growth in real DPI negative at -0.9%, its worst since June.