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Economy in Brief

U.S. Personal Income & Spending Pick Up
by Tom Moeller  August 31, 2017

Personal income increased 0.4% during July following unrevised stability in June. A 0.3% increase had been expected in the Action Economics Forecast Survey. Despite the upside surprise, y/y growth of 2.7% was below the 5.3% increase during all of 2014. Wages & salaries increased 0.5% (2.5% y/y), the same as during June which was upwardly revised. Personal interest income rebounded 0.6% (3.5% y/y) following three straight months of decline. Dividend income improved 0.5% (1.6% y/y) after a 3.0% shortfall. Rental income grew 0.4% (5.9% y/y) for the third straight month, while proprietors' income advanced 0.2% (2.5% y/y), also for the third straight month. Personal transfer receipts improved 0.2% (2.8% y/y), the same as in June. Social Security payments rose 0.4% (3.4% y/y) and Medicare payments gained a steady 0.2% (2.7% y/y).

Disposable income rose 0.3% (2.7% y/y) following no change during June. Adjusted for price changes, take-home pay improved 0.2% (1.3% y/y) after stability a month earlier.

Personal consumption expenditures increased 0.3% last month following a 0.2% rise, revised from 0.1%. A 0.4% gain had been expected. Adjusted for price change, personal spending advanced 0.2% (2.7% y/y), the same as in June. Real durable goods purchases jumped 0.8% (5.9% y/y) for the second straight month. Real nondurable goods spending rose 0.3% (2.5% y/y) following a 0.1% dip. Real spending on services rose 0.2% (2.3% y/y) for the third straight month.

The personal savings rate declined to 3.5%, the lowest level since December and down from the 6.1% high during all of 2015. Personal saving grew by roughly one quarter y/y.

The chain-type price index ticked 0.1% higher (1.4% y/y) following no change during June. Excluding food & energy, prices increased 0.1% (1.4% y/y) for the third straight month. Durable goods prices fell 0.2% (-2.0% y/y), down for the sixth straight month. Nondurable goods prices rose 0.3% (1.0% y/y) after two months of decline. Services prices improved 0.1% (2.1% y/y), following two months of 0.2% increase.

The personal income & consumption figures are available in Haver's USECON database with detail in the USNA database. The Action Economics figure is in the AS1REPNA database.

Personal Income & Outlays (%) Jul Jun May Jul Y/Y 2016 2015 2014
Personal Income 0.4 0.0 0.3 2.7 2.4 5.0 5.3
  Wages & Salaries 0.5 0.5 0.1 2.5 2.9 5.1 5.1
Disposable Personal Income 0.3 0.0 0.4 2.7 2.6 4.5 5.1
Personal Consumption Expenditures 0.3 0.2 0.2 4.2 4.0 3.9 4.4
Personal Saving Rate 3.5 3.6 3.8 5.1
(Jul '16)
4.9 6.1 5.7
PCE Chain Price Index 0.1 0.0 -0.1 1.4 1.2 0.3 1.5
  Less Food & Energy 0.1 0.1 0.1 1.4 1.8 1.3 1.6
Real Disposable Income 0.2 -0.0 0.5 1.3 1.4 4.2 3.6
Real Personal Consumption Expenditures 0.2 0.2 0.3 2.7 2.7 3.6 2.9
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