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Economy in Brief

U.S. Personal Income Edges Down in October
by Carol Stone  December 6, 2013

Personal income fell in October by 0.1% (+3.4% y/y) after a gain of 0.5% in September. An October rise of 0.3% had been forecast in the Action Economics consensus survey.  The drop occurred in farm income, down 15.2% in the month and reversing September's similar increase which had come from a lawsuit settlement payout.   Dividend income was also down, 0.7%, but was up 8.0% from a year ago.  The main wage and salary element edged up 0.1% in October (+3.2% y/y), with private industry wages up 0.1% and government salaries flat.  Nonfarm proprietors' income was up 0.2% (6.1% y/y) and rental income 0.4% (10.0% y/y).  Interest income edged up 0.1% (+3.0%), following three months of 0.1% decreases. Transfer payments were flat with September (+4.3% y/y).  A rise in personal taxes cut into disposable income, which was down 0.2% (2.6% y/y) and, when adjusted for inflation, also fell 0.2% (1.8% y/y).

Personal consumption expenditures rose 0.3% (2.7% y/y) in October, slightly better than September's 0.2%. Motor vehicle purchases recovered by 0.4% (+4.4% y/y) after September's 4.0% drop.  Spending on clothing also recovered, rising 1.2% (+2.8% y/y), after falling moderately in both September and August.  Spending on furnishings and household equipment was up 0.4% (+5.2% y/y), reversing a revised 0.2% downtick in September.  Services outlays were up 0.2% (+2.9% y/y). Real PCE also gained 0.3% in the month, making 2.1% year-on-year.

The personal savings rate fell to 4.8% in October from an upwardly revised 5.2% in September. The total amount of personal saving was off 1.6% from a year ago.

The PCE chain price index was flat in October and up just 0.7% year-on-year.  Durable goods prices were down 0.2% (-1.8% y/y) and nondurable goods prices were down 0.4% (-1.2% y/y). Services prices edged up 0.1% (1.8% y/y). Less food & energy, the chain price index rose 0.1% (1.1% y/y) for a fourth straight month.

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 (%) Oct Sep Aug Y/Y 2012 2011 2010
Personal Income -0.1 0.5 0.5 3.4 4.2 6.1 2.9
  Wages & Salaries 0.1 0.4 0.6 3.2 4.3 4.1 2.0
Disposable Personal Income -0.2 0.5 0.6 2.6 3.9 4.8 2.8
Personal Consumption Expenditures 0.3 0.2 0.3 2.7 4.1 5.0 3.8
Personal Saving Rate 4.8 5.2 5.0 5.0
(Oct'12)
5.6 5.7 5.6
PCE Chain Price Index -0.0 0.1 0.1 0.7 1.8 2.4 1.7
  Less Food & Energy 0.1 0.1 0.1 1.1 1.7 1.4 1.3
Real Disposable Income -0.2 0.4 0.5 2.0 1.7 2.4 1.1
Real Personal Consumption Expenditures 0.3 0.1 0.2 2.1 2.2 2.5 2.0
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