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Economy in Brief
EMU and Japan; EMU Flash PMIs Make Small Recovery
PMIs in June in the EMU area showed some respite from the steady decline in recent months...
French Manufacturing Gives Steady Signal As Services Edge Ahead
The French manufacturing sector gives a steady signal in June but at a level that is off-peak...
U.S. Leading Economic Indicators' Rate of Increase Eases
The Conference Board's Composite Index of Leading Economic Indicators improved 0.2% (6.1% y/y) during May...
Philadelphia Fed Factory Conditions Plunge
The Philadelphia Fed reported that its General Factory Sector Business Conditions Index retreated to 19.9 during June...
U.S. FHFA House Price Index Improves Minimally
The FHFA U.S. house price index nudged 0.1% higher (6.4% y/y) during April...
by Tom Moeller April 30, 2012
Consumers adopted a more conservative approach
to their income last month. Personal income increased 0.4% (3.2%
y/y) during March after a 0.3% February increase, last month reported as
0.2%. Last month's increase reflected a 0.3% rise (4.4% y/y) in wages and
salaries after three months of 0.4% increase. Rental income surged 0.9%
(11.8% y/y) as home renting remained strong relative to ownership.
Proprietors' income increased 0.6% (3.3% y/y). Lower interest rates
continued to weigh on interest income which rose 0.3% for the third
straight month, but it fell 2.3% y/y. Conversely, dividend income jumped
0.7% (6.2% y/y) with strong corporate profitability.
Individuals enabled the income gain to stabilize the earlier draw-down of savings. The personal savings rate ticked up to 3.8% from an unrevised 3.7% during February. Nevertheless, it remained below the 4.9% level twelve months ago and at a 2010 monthly high of 5.8%.
Growth in personal consumption expenditures eased to just 0.1% following a 0.5% February increase, revised from 0.8%. Last month's weakness reflected a 2.2% decline (+13.1% y/y) in motor vehicle purchases which was a breather after several months of strong gain. Conversely, furniture expenditures rose a strong 1.0% (6.8% y/y) and clothing spending increased 0.5% (5.9% y/y). Higher gasoline prices increased purchases by 3.6% but less driving & more fuel efficient vehicles limited the y/y gain to 3.5%. Purchases fell 2.7% y/y when adjusted for higher prices. Spending on services inched up 0.1% (3.3% y/y), the y/y gain boosted by 7.2% y/y growth in recreation and a 6.3% annual rise in food services & accommodations as they traveled more.
The PCE chain price index rose 0.2% an easier last month (2.1% y/y). The increase reflected a 1.7% rise (6.4% y/y) in gasoline prices after a 5.7% February increase. The core PCE price index increased 0.2% and the y/y increase of 2.0% 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.
| Personal Income & Outlays(%) | Mar | Feb | Jan | Y/Y | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| Personal Income | 0.4 | 0.3 | 0.3 | 3.2 | 5.1 | 3.7 | -4.3 |
| Wages & Salaries | 0.3 | 0.4 | 0.4 | 4.4 | 4.3 | 2.2 | -4.3 |
| Disposable Personal Income |
0.4 | 0.2 | 0.1 | 2.8 | 3.8 | 3.6 | -2.1 |
| Personal Consumption Expenditures |
0.1 | 0.5 | 0.3 | 1.8 | 4.7 | 3.8 | -1.7 |
| Personal Saving Rate | 3.8 | 3.7 | 4.3 | 4.9 (Mar.'11) |
4.7 | 5.3 | 5.1 |
| PCE Chain Price Index | 0.2 | 0.3 | 0.2 | 2.1 | 2.5 | 1.8 | 0.2 |
| Less Food & Energy | 0.2 | 0.1 | 0.2 | 2.0 | 1.4 | 1.4 | 1.6 |
| Real Disposable Income |
0.2 | -0.1 | -0.1 | 0.6 | 1.3 | 1.8 | -2.3 |
| Real Personal Consumption Expenditures |
0.1 | 0.5 | 0.3 | 1.8 | 2.2 | 2.0 | -1.9 |
