Recent Updates

  • US: Consumer Sentiment (Jan-prelim), GDP by Industry (Q3)
  • Consumer Sentiment Detail (Jan-prelim)
  • Canada: MSIO, Intl Transactions in Securities (Nov)
  • Ivory Coast: IP (Nov); South Africa: Financial Soundness Indicators (Nov); Turkey: House Sales (Dec), IIP (Nov)
  • Spain: International Trade (Nov)
  • Italy: BOP (Nov)
  • UK: Retail Sales (Dec)
  • Euro area: Balance of Payments (Nov)
  • more updates...

Economy in Brief

U.S. Personal Spending Growth Improves as Savings are Drawn Down
by Tom Moeller  April 30, 2015

Personal consumption expenditures increased 0.4% (3.0% y/y) during March following a 0.2% February gain, revised from 0.1%. The rise matched expectations in the Consensus Economics Forecast Survey.

Adjusted for price inflation, personal spending rose 0.3% (2.7% y/y) following little change during February. Motor vehicles and parts purchases jumped 4.0% last month (3.5% y/y) following a 2.8% decline. Furnishings & appliance spending recovered 0.8% (5.5% y/y) after a 0.7% drop. Recreational goods & vehicles purchases jumped 0.9% (9.2% y/y. Apparel purchases improved 0.2% (2.1% y/y) following three consecutive months of decline. Real services purchases remained unchanged (2.5% y/y) after a 0.2% rise. Spending on restaurants and hotels improved 0.3% (3.9% y/y).

Personal income remained unchanged last month (3.8% y/y) after an unrevised 0.4% increase. Expectations had been for a 0.3% rise. Wages & salaries improved 0.2% (3.8% y/y) following a 0.3% rise. Transfer payments firmed 0.7% (5.9% y/y) as Medicaid payments surged another 1.3% (11.8% y/y), roughly the same as during the prior two months. Rental income increased 0.5% (6.0% y/y) after a 0.4% rise but proprietors income slipped 0.1% (+2.6% y/y), the fourth decline in five months. Dividend income fell 2.9% (+7.4% y/y), the first decline since January 2014; interest income declined 0.5% for the third straight month (-1.6% y/y).

Disposable income remained unchanged (3.6% y/y) after a 0.5% jump. Real disposable income declined 0.2% (+3.3% y/y) after a 0.3% rise.

Last month's strength in spending coupled with no change in income lowered the personal savings rate to 5.3%. Nevertheless, the savings rate during last quarter averaged 5.5%, reaching its highest level since Q4 2012. Personal saving rose 12.9% during the last twelve months.

The 0.2% increase (0.3% y/y) in the chain price index followed a like increase during February. Energy prices jumped 1.5% (-18.5% y/y) as gasoline prices gained 3.9% (-27.0% y/y). Food prices fell 0.3% (+1.8% y/y). Durable goods prices fell 0.2% (-2.4% y/y) while nondurable goods prices rose 0.4% (-2.8% y/y). Services prices ticked 0.1% higher (1.8% y/y) for the fourth straight month. The price index excluding food & energy edged up 0.1% (1.2% y/y), about the same as during the last nine months.

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 (%) Mar Feb Jan Y/Y 2014 2013 2012
Personal Income 0.0 0.4 0.3 3.8 4.0 2.0 5.2
  Wages & Salaries 0.2 0.3 0.6 3.8 4.5 2.8 4.5
Disposable Personal Income 0.0 0.5 0.4 3.6 3.8 1.0 4.9
Personal Consumption Expenditures 0.4 0.2 -0.3 3.0 3.9 3.6 3.7
Personal Saving Rate 5.3 5.7 5.4 4.8
(Mar '14)
4.9 4.9 7.2
PCE Chain Price Index 0.2 0.2 -0.5 0.3 1.3 1.2 1.8
  Less Food & Energy 0.1 0.1 0.1 1.3 1.4 1.3 1.8
Real Disposable Income -0.2 0.3 0.8 3.3 2.5 -0.2 3.0
Real Personal Consumption Expenditures 0.3 -0.0 0.2 2.7 2.5 2.4 1.8
close
large image