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- US: FHFA HPI (Mar & Q1), Advance Intl Trade (Apr)
- US: Philadelphia Fed State Coincidence Indexes (Apr), HPI for Regions, States and MSAs (Q1)
- Composite Survey - United States (Flash - May), Services Survey United States (Flash - May)
- US: Regional Building Permits (Apr and YTD)
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Economy in Brief
U.S. Mortgage Loan Applications Increase
The MBA total Mortgage Market Volume Index increased 2.3% last week (24.2% y/y)...
Germany Snaps Back- Bazinga Europe: You Don't!
Month-to-month the German Ifo gauge of industry has snapped back with its headline metric rising to 8.5 in May from 6.4 in April...
U.S. New Home Sales Jump to January 2008 High; Prices Strengthen
The housing market improved significantly as the spring selling season unfolded...
U.S. Gasoline & Crude Oil Prices Strengthen
Regular gasoline prices increased to $2.30 per gallon last week (-17.1% y/y)...
Philadelphia Fed Survey of Nonmanufacturing Business Activity Index Is Roughly Steady
The Philadelphia Fed reported that its Index of Nonmanufacturing Sector Activity at the company level was fairly steady in May...
Germany: ZEW Expectations Step Back
The German ZEW index in May saw its expectations indicator fall sharply while the current index moved higher...
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