- US: Housing Vacancies & Homeownership (Q4), FHFA Home Mortgage Terms (Dec)
- US: Philadelphia Fed State Coincidence Indexes (Dec)
- US: Pending Home Sales Index (Dec)
- Canada: Payroll Employment, Earnings, and Hours (Nov)
- Ireland: Harmonized Competitiveness Indicators (Dec, Q3)
- Estonia: Money Supply (Dec); Lithuania: MFI Loans & Deposits, Money Supply (Dec); Latvia: MFI Loans & Deposits, MFI Balance Sheet, Money Supply (Dec); Slovakia: Business Survey (Jan);
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Economy in Brief
U.S. State Unemployment Rates Fall To New Lows
The overall U.S. unemployment rate in December of 5.6% stood at its six-year low and remained down from 10.0% at the late-2009 peak...
FOMC Sees Economic Expansion as "Solid"
At today's meeting of the Federal Open Market Committee, the Fed reaffirmed its prior view that the U.S. expansion is continuing at a "solid pace."...
U.S. Mortgage Loan Applications Slip; Interest Rates Notch Higher
The MBA total Mortgage Market Volume Index edged down 3.2% last week (+34.9% y/y) following the near-doubling during the prior three weeks...
Does German Success Threaten Its Prosperity?
German consumers in February are feeling great, according to GfK...
U.S. New Home Sales Increase To 2008 High
New home sales during December increased 11.6% to 481,000 (AR) from 431,000 in November...
U.S. Consumer Confidence Jumps To 2007 High
The Conference Board's consumer confidence index improved to 102.9 during January from 93.1 in December...
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