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Economy in Brief

U.S. Personal Income, Outlays & Savings Firm
by Tom Moeller  March 3, 2014

Personal income gained 0.3% during January (4.1% y/y) after little change in December. The gain beat expectations for a 0.2% rise in the Action Economics Forecast Survey. Disposable personal income increased 0.4% (4.0% y/y). Wages & salaries advanced 0.2% and the 3.6% year-to-year increase was improved. To the upside, transfer receipts jumped 1.2% (3.2% y/y), rental earnings rose 0.9% (7.9% y/y) and proprietors income gained 0.3% (4.7% y/y). Working lower were dividend income by 0.4% (+17.2% y/y) and interest income by 0.3% (+1.1 y/y). Adjusted for price inflation disposable income recovered 0.3% (-2.8% y/y).

Personal consumption expenditures matched expectations and edged 0.1% higher (3.5% y/y) after a 0.1% December uptick. Late-2013 outlay levels were revised sharply lower. Motor vehicle purchases slipped 0.1% (-0.3% y/y) after a hefty 4.7% December drop while spending on furnishings & household equipment slipped 0.2% (+1.4% y/y). Clothing purchases were off 1.2% (+0.1% y/y). Gasoline expenditures plunged 3.3% (+2.9% y/y) due to lower prices & volumes. Services outlays jumped 0.9% (4.1% y/y) led by a 1.6% rise (4.7% y/y) in health care spending. Adjusted for inflation, PCE gained 0.3% (2.2% y/y).

The personal savings rate held steady at 4.3% but earlier figures were raised with the revised spending levels. Nevertheless, the savings rate remained close to its lowest since January 2008. The total amount of personal saving has been trending lower since 2009.

The PCE chain price index ticked up 0.1% (1.2% y/y) in January. The price index excluding food & energy also rose a steady 0.1% and 1.1% y/y, the slowest annual increase since early-2011. Durable goods prices slipped 0.1% (-2.2% y/y) while nondurable goods prices were unchanged (0.7% y/y). Prices for services gained 0.2% (1.9% 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 (%) Jan Dec Nov Y/Y 2013 2012 2011
Personal Income 0.3 -0.0 0.3 4.1 2.8 4.2 6.1
  Wages & Salaries 0.2 -0.1 0.6 3.6 3.1 4.3 4.1
Disposable Personal Income 0.4 -0.1 0.2 4.0 1.9 3.9 4.8
Personal Consumption Expenditures 0.4 0.1 0.5 3.5 3.1 4.1 5.0
Personal Saving Rate 4.3 4.3 4.4 3.6
(Jan '13)
4.5 5.6 5.7
PCE Chain Price Index 0.1 0.2 0.1 1.2 1.1 1.8 2.4
  Less Food & Energy 0.1 0.1 0.1 1.1 1.2 1.8 1.4
Real Disposable Income 0.3 -0.2 0.1 2.8 0.7 2.0 2.4
Real Personal Consumption Expenditures 0.3 -0.1 0.4 2.2 2.0 2.2 2.5
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