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Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller August 30, 2018
Personal consumption expenditures rose 0.4% (5.2% y/y) in July, the same as during June which was unrevised. A 0.3% increase had been expected in the Action Economics Forecast Survey. Personal income improved an expected 0.3% (4.7% y/y) following an unrevised 0.4% gain.
In constant dollars, personal spending increased 0.2% (2.8% y/y), the weakest increase in four months. Real durable goods spending fell 0.5% (+4.8% y/y), the first decline since February. A 1.3% shortfall (+0.1% y/y) in constant dollar purchases of motor vehicles & parts was the third consecutive decline. It added to a 0.3% fall (+6.1% y/y) in real spending on furniture & and appliances which came after two months of firm increase. Recreational goods & vehicles purchases rose 0.3% in real terms (8.9% y/y) following a 0.6% gain. Real outlays on nondurable goods strengthened 0.6% last month (3.2% y/y) after a 0.2% decline. Constant dollar clothing & footwear purchases jumped 1.5% (4.6% y/y) after a 0.5% decline, while the volume of gasoline & oil buying gained 0.4% (-0.1% y/y) following a 1.1% decline. Constant dollar spending on food & beverages rebounded 0.3% (3.8% y/y) following a 0.2% drop. Real services spending improved 0.2% (2.4% y/y) for the second month in the last three. Outlays at restaurants & hotels strengthened 0.9% in constant dollars (4.9% y/y), the third month of strong gain. Real health care outlays improved 0.3% (2.5% y/y) for the second straight month and constant dollar outlays on housing & utilities gained 0.2% (1.5% y/y) for the second straight month. Real financial services spending held steady (0.6% y/y) after three months of firm increase. Spending on recreation services was off 0.4% (+0.3% y/y) in real terms after a 0.6% rise.
The 0.3% increase in personal income reflected a 0.4% rise (4.7% y/y) in wages & salaries. It was the fourth such gain in the last five months. Rental income strengthened 0.7% (4.6% y/y), the strongest gain in four months. Proprietors income, however, eased slightly (+5.7% y/y) after a 0.6% rise. Dividend payments strengthened 0.6% (3.9% y/y) after a 0.5% rise. Interest income edged 0.1% higher (8.3% y/y) following three consecutive 0.3% gains. Transfer receipts increased 0.3% (4.1% y/y) after a 0.2% rise. Social security payments improved 0.3% (5.1% y/y) after rising 0.4%. Medicare payments rose 0.7% (5.3% y/y) following two 0.6% gains but Medicaid payments fell 0.4% (+3.2% y/y) following stability in July. Unemployment insurance payments gained 0.8% (-13.4% y/y) after no change while veterans benefits surged 3.8% (10.6% y/y) after two months of decline.
Disposable personal income increased 0.3% (5.3% y/y) after gaining 0.4% in three of the prior four months. Real disposable income improved 0.2% (2.9% y/y) after a 0.3% rise.
The personal savings rate was fairly stable at 6.7%, but that was down from 7.2% in March. Personal saving increased 5.5% y/y.
The chain type price index inched 0.1% higher for a second straight month. The 2.3% y/y increase was the strongest, however, since March 2012. The index excluding food & energy rose 0.2% (2.0% y/y) as it has for most of this year. Energy prices declined 0.5% (+13.4% y/y) following a 0.2% fall. Food prices inched 0.1% higher (0.5% y/y) after a 0.2% rise.
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 | 2017 | 2016 | 2015 |
---|---|---|---|---|---|---|---|
Personal Income | 0.3 | 0.4 | 0.3 | 4.7 | 4.4 | 2.6 | 4.9 |
Wages & Salaries | 0.4 | 0.4 | 0.3 | 4.7 | 4.6 | 2.9 | 5.1 |
Disposable Personal Income | 0.3 | 0.4 | 0.4 | 5.3 | 4.4 | 2.8 | 4.4 |
Personal Consumption Expenditures | 0.4 | 0.4 | 0.5 | 5.2 | 4.3 | 3.8 | 4.0 |
Personal Saving Rate | 6.7 | 6.8 | 6.8 | 6.7 (Jul'17) |
6.7 | 6.7 | 7.6 |
PCE Chain Price Index | 0.1 | 0.1 | 0.2 | 2.3 | 1.8 | 1.1 | 0.3 |
Less Food & Energy | 0.2 | 0.1 | 0.2 | 2.0 | 1.6 | 1.7 | 1.3 |
Real Disposable Income | 0.2 | 0.3 | 0.2 | 2.9 | 2.6 | 1.7 | 4.1 |
Real Personal Consumption Expenditures | 0.2 | 0.3 | 0.3 | 2.8 | 2.5 | 2.7 | 3.7 |