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Economy in Brief

U.S. Personal Income Rebounded
by Tom Moeller December 23, 2004

Personal income rose a moderate 0.3% last month following the unrevised 0.6% spurt in October. Consensus expectations had been for a 0.2% rise.

The gain in wages & salaries eased to 0.2% (+4.6% y/y) after the 0.6% surge in October. Factory sector wages eked out a 0.1% (1.1% y/y) gain after falling 0.1% the prior month.

Personal disposable income rose 0.3% (4.9% y/y), half the gain in October. Disposable income growth adjusted for inflation was stable m/m at 0.2% (2.2% y/y).

Personal consumption eased as well, growing 0.2%, one quarter the rise in October. A 2.4% decline in durable goods spending reflected a 3.4% m/m drop in total sales of light motor vehicles. Spending on nondurables also eased, up 0.4% after a 1.6% spike in October. However, services spending picked up and grew 0.6% (5.6% y/y), up from the 0.4%-0.5% range of the prior three months.

The PCE chain price index rose just 0.1%, reflecting the recent decline in gasoline prices. Less food & energy prices rose 0.1% (1.5% y/y), the average for the last eight months.

"Open Mouth Operations: A Swiss Case Study" of a central bank's impact on the slope of the yield curve from the Federal Reserve Bank of St. Louis can be found here.

Disposition of Personal Income Nov Oct Y/Y 2003 2002 2001
Personal Income 0.3% 0.6% 4.9% 3.2% 1.8% 3.5%
Personal Consumption 0.2% 0.8% 6.1% 5.2% 4.6% 4.7%
Savings Rate 0.3% 0.1% 1.3% 1.4% 2.0% 1.8%
PCE Chain Price Index 0.1% 0.4% 2.6% 1.9% 1.4% 2.1%
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