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by Tom Moeller February 28, 2005
Personal income dropped last month 2.3% following the 3.7% jump in December which was driven by Microsoft's dividend payment. Consensus expectations had been for a 2.6% decline. Excluding the dividend effect personal income increased 0.5% last month after a 0.6% rise in December. Figures from July through December were revised
Wage & salary income rose 0.6% (5.8% y/y) in January after an upwardly revised 0.5% December gain. Factory sector wages inched 0.1% higher but rose 4.8% y/y. Earlier figures were revised up sharply
Personal disposable income fell 2.6% (5.8% y/y) after the 4.1% surge in December. Adjusted for price inflation disposable income fell 2.8% m/m but rose 3.5% y/y.
Personal consumption fell slightly after the 0.8% surge in December and spending was lightly short of Consensus expectations for a 0.1% rise. Durable goods spending fell 4.3% and reversed a like gain in December due to lower motor vehicle sales. Spending on nondurables rose 0.8% despite the decline in gasoline prices last month and services spending rose 0.4% (5.3% y/y).
The PCE chain price index rose 0.2% in January. The 0.3% rise in the price index less food & energy was the steepest since December 2002.
| Disposition of Personal Income | Jan | Dec | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Personal Income | -2.3% | 3.7% | 6.0% | 5.6% | 3.2% | 1.8% |
| Personal Consumption | -0.0% | 0.8% | 5.7% | 6.0% | 5.2% | 4.6% |
| Savings Rate | 1.0% | 3.6% | 1.1% | 1.2% | 1.4% | 2.0% |
| PCE Chain Price Index | 0.2% | -0.0% | 2.2% | 2.2% | 1.9% | 1.4% |
| Less food & energy | 0.3% | 0.0% | 1.6% | 1.5% | 1.3% | 1.8% |
