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Economy in Brief

U.S. Personal Spending & Income Gains Improve
by Tom Moeller  December 20, 2019

Personal consumption expenditures rose 0.4% (3.9% y/y) during November after an unrevised 0.3% October gain. The increase compared to a 0.4% rise expected in the Action Economics Forecast Survey. In constant dollars, spending increased 0.3% ( 2.4% y/y), the strongest rise in four months. Real durable goods spending rose 1.2% (4.8% y/y) and reversed October's 1.0% decline. Spending on motor vehicles rose 2.3% (1.9% y/y) while recreational goods & vehicles outlays rose 1.1% (10.5% y/y. Real nondurable goods buying increased 0.1% (2.4% y/y) after a 0.3% gain. Apparel spending eased 0.3% (+1.5% y/y). Real spending on services rose 0.2% (2.0% y/y) for the fifth straight month. Health care spending rose 0.4% (3.6% y/y) but spending at restaurants fell 0.3% (+2.0% y/y).

Personal income strengthened 0.5% last month following a 0.1% uptick in October, revised from 0.0%. A 0.3% rise was expected. Wages & salaries improved 0.4% (5.3% y/y) after a 0.5% increase. Proprietors income rebounded 1.9% (5.6% y/y) and recovered the October decline. Rental incomes rose a steady 0.5% (3.0% y/y), and receipts on assets rebounded 0.8% (1.4% y/y) due to a 1.4% rise (0.2% y/y) in interest income. Transfer receipts edged 0.1% higher (7.5% y/y), the weakest increase in 12 months.

Disposable personal income rose 0.5% (4.6% y/y) after holding steady in October. Adjusted for price inflation, take-home pay increased 0.4% (3.1% y/y) and reversed October's 0.2% decline.

Last month's strength in income relative to the gain in spending raised the personal savings rate to 7.9% from 7.8%. The level of personal saving rose 14.3% y/y last month.

The PCE chain price index increased 0.2% (1.5% y/y), the same as in October. The price index excluding food & energy edged 0.1% higher (1.6% y/y) for the fourth straight month. Energy prices increased 0.8% (-0.7% y/y) after a 2.8% gain. Food prices held steady (0.9%) for the second month in the last three.

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

Personal Income & Outlays (%) Nov Oct Sep Nov Y/Y 2018 2017 2016
Personal Income 0.5 0.1 0.3 4.9 5.6 4.7 2.6
  Wages & Salaries 0.4 0.5 0.1 5.3 5.0 4.7 2.9
Disposable Personal Income 0.5 0.0 0.4 4.6 6.1 4.7 2.8
Personal Consumption Expenditures 0.4 0.3 0.2 3.9 5.2 4.4 3.8
Personal Saving Rate 7.9 7.8 8.1 7.2 (Nov '18) 7.7 7.0 6.8
PCE Chain Price Index 0.2 0.2 -0.0 1.5 2.1 1.8 1.0
  Less Food & Energy 0.1 0.1 0.1 1.6 2.0 1.6 1.6
Real Disposable Income 0.4 -0.2 0.4 3.1 4.0 2.9 1.8
Real Personal Consumption Expenditures 0.3 0.1 0.2 2.4 3.0 2.6 2.7
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