·
Nominal personal income inched up 0.1% last month following a
revised 1.8% May surge which was due to the first installment of the
government's tax rebate checks being mailed out. During May, the
government distributed $48.1 billion in economic stimulus checks. Last
month, the government sent $27.9 billion worth of checks. The June gain
in income exceeded Consensus expectations for a 0.2% decline. Excluding
rebates income rose just 0.4%.
· Disposable personal income fell 1.9% last month after the 5.7% spike during May. Net taxes jumped 18.6% in June following the 24.4% May decline.
· Wage & salary income rose a
minimal 0.2% (4.5% y/y) after a 0.3% rise during May. These moderate
increases reduced the annualized three-month growth in wages to 2.8%
versus a 5.8% rise during 2007 and a 6.3% 2006 gain. Factory sector
wages rose 0.1% (1.5% y/y) after a 0.2% May uptick. Wages & salaries
in the private service-providing industries ticked up 0.2% (5.1% y/y).
Wages in the government sector, however, have been strong and they
posted a 0.5% (5.4% y/y) rise and three-month growth rose to 5.3%.
· Interest income fell 0.7% (-1.8% y/y) and that was the ninth consecutive month of decline. Year-to-year growth fell to -1.8% after a 7.9% rise during all of 2007. Dividend income rose 0.6% (8.4% y/y) after a 12.4% rise last year and a 21.7% gain during 2006.
· The PCE
chain price index jumped 0.8% driven higher by rising energy prices.
Some spillover to other prices may be apparent as the core PCE price
index rose 0.3%. That exceeded Consensus forecasts for a 0.2% rise.
Three-month growth in core prices rose to 2.3% from the recent low of
1.9%. Durable goods prices fell at a 2.0% rate during the last
three months but services prices rose at an accelerated 4.3% annual
rate.
· Personal consumption expenditures rose another 0.6% after the 0.8% during May. Adjusted for price inflation, however, real spending fell 0.2% after a 0.3% May increase. Three-month growth in real spending amounted to just 0.9% (AR).
· The personal savings rate halved versus May to 2.5% as a result of the rebate checks started being been spent.
· The Changing Nature of the U.S. Balance of Payments from the Federal Reserve Bank of New York can be found here.