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Economy in Brief
U.S. Energy Prices Ease Broadly
The price of regular gasoline eased to $2.85 per gallon (+53.8% y/y) in the week ended April 12...
U.S. Government Budget Deficit Widens During March
The U.S. Treasury Department reported a federal budget deficit of $659.6 billion during March...
FIBER: Industrial Commodity Prices Improve Modestly
The FIBER Industrial Materials Price Index increased 0.9% during the four weeks ended April 9...
EMU Retail Sales Jump, Regaining Some of the January Drop
February finds EU retail sales and motor vehicle registration rebounding...
U.S. PPI Posts Broad-Based Strength in March
The Producer Price Index for final demand jumped 1.0% (4.2% y/y) during March...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
Monetary Policy Blunder: Not Managing Economic & Financial Outcomes Equally
Monetary Policy at a Crossroad: Policymakers Need to Break Promise of Easy Money to Avoid Boom-Bust
State Coincident Indexes in January
Data Surprises, Markets and COVID
by Tom Moeller March 2, 2015
Personal income rose an expected 0.3% during January (4.6% y/y) following an unrevised 0.3% December increase. The expectations figure is from the Consensus Economics Forecast Survey. Wages & salaries strengthened 0.6% (4.9% y/y) following a 0.1% uptick. Transfer payments surged 1.0% (5.9% y/y) as Medicaid payments strengthened 1.1% (11.8% y/y). These gains were offset by a 0.9% decline (+3.7% y/y) in proprietors income but rental income increased 0.3% (7.2% y/y). Dividend income ticked 0.1% higher (8.6% y/y) with improved corporate profitability. Interest income declined 0.5% and fell 1.0% y/y with lower interest rates.
Personal consumption expenditures declined 0.2% (+3.6% y/y) following an unrevised 0.3% decline. Personal spending has fallen at a 0.1% annual rate during the last three months. The latest decline outpaced expectations for a 0.1% slip. The PCE chain price index fell 0.5% (+0.2% y/y) following two months of 0.2% decline. As a result, the y/y gain of 0.2% was the weakest since October 2009.
Real disposable income increased 0.9% (4.2% y/y) following two months of 0.5% rise. Real personal spending gained 0.3% (3.4% y/y) after a 0.1% slip.
In constant dollars, motor vehicles and parts purchases fell 0.2% last month (+10.6% y/y) following a 3.1% December drop. Furnishings & appliance spending improved 0.3% (9.2% y/y) after a 0.7% rise. Recreational goods & vehicles purchases improved 0.2%, but by an outsized 12.9% y/y. Apparel purchases countered some of this strength with a 0.6% drop (4.7% y/y) after a 0.8% decline. Real services purchases increased 0.4% (2.5% y/y) after a 0.1% uptick. Spending on restaurants and hotels remained strong and posted a 0.3% rise (6.2% y/y) after a 1.2% jump.
The strength in income accompanied by the weakness in spending lifted the personal savings rate to 5.5%, the highest level since December 2012. Personal saving rose 18.0% during the last twelve months.
The 0.5% decline in the chain price index reflected a 10.4% drop (-21.2% y/y) in energy prices while food prices edged 0.2% lower (+2.7% y/y). Durable goods prices were off 0.3% (-2.8% y/y) and nondurable goods prices fell 2.3% (-3.7% y/y) with lower gasoline costs. Services prices ticked 0.1% higher (2.0% y/y) for the second straight month. The price index excluding food & energy edged up 0.1% m/m (1.3% y/y) following no change.
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 (%) | Jan | Dec | Nov | Y/Y | 2014 | 2013 | 2012 |
---|---|---|---|---|---|---|---|
Personal Income | 0.3 | 0.3 | 0.4 | 4.6 | 4.0 | 2.0 | 5.2 |
Wages & Salaries | 0.6 | 0.1 | 0.8 | 4.9 | 4.5 | 2.8 | 4.5 |
Disposable Personal Income | 0.4 | 0.3 | 0.3 | 4.4 | 3.9 | 1.0 | 4.9 |
Personal Consumption Expenditures | -0.2 | -0.3 | 0.4 | 3.6 | 3.9 | 3.6 | 3.7 |
Personal Saving Rate | 5.5 | 5.0 | 4.5 | 4.9 (Jan '14) |
4.9 | 4.9 | 7.2 |
PCE Chain Price Index | -0.5 | -0.2 | -0.2 | 0.2 | 1.3 | 1.2 | 1.8 |
Less Food & Energy | 0.1 | 0.0 | 0.1 | 1.3 | 1.4 | 1.3 | 1.8 |
Real Disposable Income | 0.9 | 0.5 | 0.5 | 4.2 | 2.5 | -0.2 | 3.0 |
Real Personal Consumption Expenditures | 0.3 | -0.1 | 0.6 | 3.4 | 2.5 | 2.4 | 1.8 |