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Economy in Brief

U.S. Personal Income & Spending Nudge Higher
by Tom Moeller  April 29, 2013

Personal income inched up 0.2% during March (2.5% y/y) following an unrevised 1.1% advance during February. The rise fell short of consensus expectations for a 0.4% increase. Rental income again advanced 1.9% (12.8% y/y) and proprietors income gained a strong 0.7% (6.7% y/y). Dividend income also was firm and rose 0.6% (8.6% y/y). Strength in these areas was, however, offset by moderation elsewhere. Wages & salaries rose 0.2% (2.5% y/y) following February's 0.7% jump. Transfer receipts also gained just 0.2% (3.5% y/y) while interest income fell 1.2% (-1.3% y/y) for the third consecutive month.

A modest 0.2% rise (3.2% y/y) in personal consumption expenditures accompanied the slim gain in income. No change in spending was expected. It followed a 0.7% gain during February but was held back by a 4.9% decline (-5.0% y/y) in gasoline expenditures. Motor vehicle expenditures were roughly unchanged (+9.3% y/y) as was spending on home furnishings & appliances (1.8% y/y). Services spending gained 0.7% (3.8% y/y) reflecting a 1.6% jump (5.8% y/y) in recreation. Apparel spending slipped 0.1% (+0.9% y/y) while recreational goods outlays fell 0.8% (+2.1% y/y).  

The equal gains in income & spending left the personal savings rate stable m/m at 2.7%. The level remained well below the 3.7% rate 12 months ago and the 4.0%-to-5.5% averages of the prior four years.

The PCE chain price index slipped 0.1% (+1.0% y/y), driven lower by a 4.1% drop (-2.9% y/y) in gasoline & energy prices. Elsewhere, durable goods prices fell 0.2%% (-1.7% y/y) while apparel prices fell 1.1% (+1.3% y/y). Food prices ticked up 0.1% (1.1% y/y) and services prices also inched up 0.1% (1.7% y/y). Excluding food & energy, the price index was unchanged (1.1% y/y).  

Adjusted for price changes, disposable income during March rose 0.3% (1.1% y/y) while real spending also gained 0.3% (2.2% y/y).

The personal income & consumption figures are available in Haver's USECON and USNA databases. The consensus expectation figure is in the AS1REPNA database. 

 

Personal Income & Outlays (%) Mar Feb Jan Y/Y 2012 2011 2010
Personal Income 0.2 1.1 -3.6 2.5 3.5 5.1 3.8
  Wages & Salaries 0.2 0.7 -0.6 2.5 3.3 4.0 2.1
Disposable Personal Income 0.2 1.1 -4.0 2.0 3.3 3.8 3.8
Personal Consumption Expenditures 0.2 0.7 0.3 3.2 3.7 5.0 3.8
Personal Saving Rate 2.7 2.7 2.3 3.7
(Mar'12)
3.9 14.2 5.1
PCE Chain Price Index -0.1 0.4 0.1 1.0 1.7 2.4 1.9
  Less Food & Energy 0.0 0.1 0.2 1.1 1.7 1.4 1.5
Real Disposable Income 0.3 0.7 -4.0 1.1 1.5 1.3 1.8
Real Personal Consumption Expenditures 0.3 0.3 0.2 2.2 1.9 2.5 1.8
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