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Economy in Brief
Texas Factory Sector Growth Eases
The Dallas Fed reported in its Texas Manufacturing Outlook Survey that the General Business Activity Index backpedaled to 8.3 during March...
IFO Gain Turns Bund Yield Positive But It Won't Turn Lead Into Gold
The IFO diffusion index for March is unchanged...
U.S. Existing Home Sales Strengthen
The NAR reported that sales of existing homes jumped 11.8% (-1.8% y/y) during February to 5.510 million units (SAAR)...
U.S. Government Budget Deficit Deepens
The U.S. Treasury Department reported that the federal government budget deficit for February of $234.0 billion...
Wholesale Inventories and Sales Rise
Wholesale inventories increased 1.2% m/m (7.7% y/y) during January...
by Tom Moeller December 21, 2007
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.
| Disposition of Personal Income | November | October | Y/Y | 2006 | 2005 | 2004 |
|---|---|---|---|---|---|---|
| Personal Income | 0.4% | 0.3% | 6.1% | 6.6% | 5.9% | 6.2% |
| Personal Consumption | 1.1% | 0.4% | 6.7% | 5.9% | 6.2% | 6.4% |
| Saving Rate | -0.5% | 0.3% | 0.5% (Nov. 06) | 0.4% | 0.5% | 2.1% |
| PCE Chain Price Index | 0.6% | 0.3% | 3.6% | 2.8% | 2.9% | 2.6% |
| Less food & energy | 0.2% | 0.2% | 2.2% | 2.2% | 2.2% | 2.1% |
