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Economy in Brief

U.S. Personal Income Rebound Generates Little Change in Spending
by Tom Moeller  June 1, 2015

Personal income recovered 0.4% during April (4.1% y/y) after remaining unchanged in March, as indicated last month. Expectations had been for a 0.3% rise in the Consensus Economics Forecast Survey. Wages & salaries improved 0.2% (4.6% y/y) following a 0.1% rise, revised from 0.2%. Rental income jumped 0.6% (5.9% y/y) following a 0.5% improvement. Wage & salary income gained 0.2% (4.6% y/y) after a 0.1% uptick. Transfer payments also improved 0.2% (5.8% y/y) following a 0.8% jump. Medicaid payments declined 0.5% (10.9% y/y) after surging during the prior three months. Proprietors income rose 0.2% (1.4% y/y) after declines in four of the previous five months. Dividend income rebounded 1.2% (7.4% y/y) and interest income recovered 1.3% (-0.8% y/y).

Disposable income improved 0.4% (3.6% y/y) following no change. Real disposable income gained 0.3% (3.5% y/y) after a 0.2% decline.

Personal consumption expenditures declined minimally (+2.8% y/y) following an upwardly revised 0.5% rise. Expectations had been for a 0.2% increase. Adjusted for price inflation, personal spending also was little-changed. Durable goods purchases fell 0.8% (+5.3% y/y), pulled lower by a 1.8% drop (+4.6% y/y) in spending on motor vehicles. Furniture spending also was off 1.3% (+4.2% y/y), reversing March's rise. Nondurable goods purchases slipped 0.1% (+1.6% y/y) as gasoline spending dropped 2.3% (+0.5% y/y). Clothing purchases increased 0.3% (1.6% y/y) for the second straight month. Services spending nudged 0.1% higher (2.6% y/y) but recreation services purchases jumped 0.8% (1.0% y/y). Health care expenditures improved 0.1% (5.3% y/y).

Last month's strength in income coupled with no change in spending generated a rebound in the personal savings rate to 5.6% from 5.2%. Personal saving rose 14.7% during the last twelve months.

The chain price index remained unchanged following two months of 0.2% increase. Energy prices fell 1.4% (-20.0% y/y) while food prices were off 0.2% (+1.3% y/y). Durable goods prices improved 0.1% (-2.2% y/y) as nondurable goods prices fell 0.3% (-3.5% y/y). Services prices ticked 0.1% higher (1.7% y/y) for the fifth straight month. The price index excluding food & energy edged 0.1% higher (1.2% y/y), about the same as during the last ten 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 (%) Apr Mar Feb Y/Y 2014 2013 2012
Personal Income 0.4 0.0 0.4 4.1 4.0 2.0 5.2
  Wages & Salaries 0.2 0.1 0.3 4.6 4.6 2.8 4.5
Disposable Personal Income 0.4 0.0 0.4 3.6 3.8 1.0 4.9
Personal Consumption Expenditures -0.0 0.5 0.1 2.8 3.9 3.6 3.7
Personal Saving Rate 5.6 5.2 5.7 5.0
(Apr. '14)
4.9 4.9 7.2
PCE Chain Price Index 0.0 0.2 0.2 0.1 1.3 1.2 1.8
  Less Food & Energy 0.1 0.1 0.1 1.2 1.4 1.3 1.8
Real Disposable Income 0.3 -0.2 0.3 3.5 2.5 -0.2 3.0
Real Personal Consumption Expenditures -0.0 0.4 -0.0 2.7 2.5 2.4 1.8
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