- Canada: Retail Trade (Jun), CPI (Jul)
- Mexico: Semimonthly CPI, National Employment Survey (Jul)
- Croatia: Earnings (Jun), Unemployment Rate (Jul); Albania: Domestic Debt, Banking System Liabilities (Q2); Montenegro: Wages (Jul); Hungary: Wages (Jun), Balance Sheet of Insurance Companies (Q2)
- Ireland: WPI, PPI (Jul)
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Economy in Brief
U.S. LEI Begins to Accelerate
The index of leading economic indicators is beginning to accelerate...
Philadelphia Fed Business Conditions Index Improves; Expectations Surge
The Philadelphia Fed reported that its General Business Conditions Index for August jumped to 28.0 from 23.9 in July...
U.S. Initial Claims for Unemployment Insurance Slip
Initial claims for jobless insurance during the week ended August 16 eased to 298,000 from 312,000 in the prior week...
EMU PMIs Wither Again in August- It Isn't the Heat
The flash PMI for the European Monetary Union in August slipped once again to 52.8 from 54.0 in July...
U.S. Mortgage Loan Applications Continue To Track Sideways
The MBA total Mortgage Market Volume Index improved 1.4% last week (-24.0% y/y)...
UK Orders Jump
Industrial orders in the U.K. saw the net order gauge rise to 11 in August...
by Tom Moeller March 30, 2012
Personal income increased just 0.2% during February after lessened gains of 0.2% and 0.4% during the prior two months. The latest rise missed expectations for a 0.4% gain. Wage & salary disbursements reflected the improved gains in payroll employment with a 0.3% rise (4.4% y/y). However, the firm gain was offset by another dip in interest income (-3.1% y/y) and just a 0.1% rise (1.0% y/y) in transfer receipts. Disposable personal income rose 0.2% (2.6% y/y) although take-home pay, when adjusted for price inflation, slipped 0.1% (+0.3% y/y), down for the third month in the last four.
Despite these disappointments consumers kept spending. Personal consumption expenditures jumped 0.8% (4.1% y/y), their strongest gain in a year. Earlier figures were revised upward. Expectations had been for a 0.6% rise. The increase was driven by a 3.9% rise (2.6% y/y) in spending on gasoline, a 3.3% gain (9.5% y/y) in motor vehicles and a 1.2% increase (4.4% y/y) in clothing. Spending on recreation also rose a firm 0.9% (7.5% y/y). The rise in gasoline outlays actually translated into a 7.0% y/y decline when adjusted for higher prices. Overall, when adjusted for inflation real PCE increased 0.5% (1.8% y/y), the best gain since June.
All this spending came at the expense of savings. The personal savings rate fell to 3.7% from a downwardly revised 4.3% during January. It remained below the 5.0% level twelve months ago and a 2010 monthly high of 5.8%.
The PCE chain price index rose 0.3% last month (2.3% y/y), the strongest increase since August. The increase reflected a 5.7% rise (10.4% y/y) in gasoline prices after a 0.9% January rise. The core PCE price index ticked up 0.1% and the y/y increase of 1.9% was up from the record low 12-month change of 0.9% reached last December.
The personal income & consumption figures are available in Haver's USECON and USNA databases. The expectations figures are in the AS1REPNA database.
Okun's Law and Long Expansions from the Federal Reserve Bank of New York is available here.
|Personal Income & Outlays(%)||Feb||Jan||Dec||Y/Y||2011||2010||2009|
|Wages & Salaries||0.3||0.4||0.4||4.4||4.3||2.2||-4.3|
|Personal Saving Rate||3.7||4.3||4.7||5.0
|PCE Chain Price Index||0.3||0.2||0.1||2.3||2.5||1.8||0.2|
|Less Food & Energy||0.1||0.2||0.2||1.9||1.4||1.4||1.6|
|Real Personal Consumption