Recent Updates
- US: Employment Situation (Feb), Intl Trade (Jan)
- US: Establishment Survey Detail (Feb)
- US: Household Survey Detail (Feb)
- Canada: International Trade (Jan), Ivey PMI (Feb)
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Economy in Brief
U.S. Consumer Credit Outstanding Declines in January
Consumers reduced credit balances further in January...
U.S. Trade Deficit Widens to $68.2 Billion in January
The U.S. trade deficit in goods and services widened to $68.2 billion in January...
German Order Growth Gets Back in Gear Despite the Headwinds
German order growth is back in gear with total orders rising by 1.4% m/m in January...
U.S. Factory Orders & Shipments Rise Again in January
Manufacturing activity is strengthening. Factory orders rose 2.6% (2.8% y/y) in January...
U.S. Initial Unemployment Insurance Claims Rise Just 9,000
Initial claims for unemployment insurance rose modestly by 9,000 to 745,000 in the week ended February 27...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller September 1, 2005
Personal income rose just 0.3% in July following an unrevised 0.5% increase in June. Consensus expectations had been for a 0.5% increase. Combined with a similarly modest gain in May, the three-month growth in income slowed to 4.4% (AR) from 6.9% in January.
The Trimmed-Mean PCE Inflation rate reflects new research from the Federal Reserve Bank of Dallas. The measure indicates that core price inflation may be running one-half of a percentage faster than what is being indicated by other measures. It is now available in USECON and the Dallas Fed's research is available here.
The PCE chain price index, from the US Bureau of Economic Analysis, rose 0.3% following a June dip. Gasoline prices rose 6.1% after two months of decline and rose another 8.6% in August. Less food & energy, prices ticked just 0.1% higher following no change in June.
Wages & salaries rose 0.5% (6.9% y/y), the strongest monthly increase since April. Factory sector wages rose 0.5% (5.7% y/y) and prior month's figures were revised up. Sector wages rose 0.6% (8.0% y/y), the strongest since April.
Disposable personal income increased 0.3% (5.1% y/y) after a 0.5% June increase. Adjusted for price inflation take home pay was unchanged (2.5% y/y), the first month of no growth since March.
Personal consumption expenditures surged another 1.0% owing to a 10.6% jump in sales of light vehicles. That followed a 7.5% spike in June vehicle sales. Spending on durables overall rose 4.7% (9.4% y/y) and nondurables spending rose 0.6% (8.0% y/y). Services spending increased 0.4% (5.7% y/y).
The personal savings rate went negative for the first time since 2001 although the household sector's net worth (from the Flow of Funds Accounts) has been rising, helped by a 16% increase in owners' equity in real estate.
Understanding the Term Structure of Interest Rates from the Federal Reserve Bank of St. Louis is available here.
Disposition of Personal Income | July | June | Y/Y | 2004 | 2003 | 2002 |
---|---|---|---|---|---|---|
Personal Income | 0.3% | 0.5% | 6.3% | 5.9% | 3.2% | 1.8% |
Personal Consumption | 1.0% | 1.0% | 6.9% | 6.5% | 4.9% | 4.2% |
Savings Rate | -0.6% | 0.0% | 1.1% | 1.7% | 2.1% | 2.4% |
PCE Chain Price Index | 0.3% | -0.0% | 2.5% | 2.6% | 1.9% | 1.4% |
Less food & energy | 0.1% | 0.0% | 1.8% | 2.0% | 1.3% | 1.8% |