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Economy in Brief

U.S. Personal Income Has Moderate Gain, Spending Is Up 0.6% in November
by Carol Stone  December 23, 2014

Personal income rose 0.4% in November (4.2% y/y) after October's 0.3%, revised modestly from 0.2%. The November increase was slightly below expectations in the Action Economics Forecast Survey for a 0.5% gain. Wages & salaries were up 0.5% (4.5% y/y) as was proprietors income (4.9% y/y). Rental income edged up just 0.1% (6.3% y/y) while personal transfer receipts were flat (5.0% y/y). Earnings from dividends continued strong, with a 0.9% gain (6.9% y/y) even as interest income had another 0.2% fall and was down 0.4% y/y. Disposable income increased 0.3% (4.1% y/y) and in real terms it was firmer with a 0.5% increase (2.9% y/y).

Personal consumption expenditures grew 0.6% in November (4.0% y/y) after 0.2% in October. The Action Economics survey had projected 0.5%. Motor vehicle purchases gained 3.2% (+7.7% y/y) following a 0.5% rise. Spending on furnishings & durable household equipment improved 0.7% (3.5% y/y) after a 0.2% increase. Apparel outlays were up 1.1% (3.3% y/y) after a 0.3% rise while spending on gasoline continued down with falling prices, this time by 2.3% (-7.2% y/y) following a 2.8% drop. Services spending was up 0.6% (4.3% y/y), again with restaurants and accommodations up noticeably, 0.7% (6.8% y/y), after October's upwardly revised 1.2%. In chained dollars, overall spending increased 0.7% (2.8% y/y).

The personal saving rate was 4.4%, and October's rate was revised to 4.6% from 5.0%. Personal saving fell 4.2% (+5.5% y/y) following a 2.1% increase.

The chain price index fell 0.2% last month (1.2% y/y), following no change in October. Energy prices were down 4.0% (-5.4% y/y) while food prices rose 0.3% (2.8% y/y). Durable goods prices also fell, by 0.7% (-2.6% y/y) and nondurable goods prices fell 1.0% (-0.1% y/y). Gasoline prices dropped 6.2% m/m and were an even 10.0% below a year ago. Services prices rose 0.2% (2.2% y/y). The price index excluding food & energy was flat m/m and up 1.5% y/y.

The personal income & consumption figures are available in Haver's USECON database with detail in the USNA database. The consensus expectation figures are in the AS1REPNA database.

Personal Income & Outlays (%) Nov Oct Sep Y/Y 2013 2012 2011
Personal Income 0.4 0.3 0.2 4.2 2.2 5.2 6.2
  Wages & Salaries 0.5 0.3 0.2 4.5 2.8 4.5 4.0
Disposable Personal Income 0.3 0.3 0.1 4.1 1.0 4.9 5.0
Personal Consumption Expenditures 0.6 0.2 0.2 4.0 3.6 3.7 4.8
Personal Saving Rate 4.4 4.6 4.5 4.3
(Nov. '13)
4.9 7.2 6.0
PCE Chain Price Index -0.2 0.0 0.1 1.2 1.2 1.8 2.5
  Less Food & Energy 0.0 0.2 0.1 1.4 1.3 1.8 1.5
Real Disposable Income 0.5 0.3 0.1 2.9 -0.2 3.0 2.5
Real Personal Consumption Expenditures 0.7 0.2 0.2 2.8 2.4 1.8 2.3
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