Recent Updates
- **EIA releases, including WPSR, are delayed by the source**
- US: New Residential Sales (May)
- Canada: Payroll Employment, Earnings, & Hours (Apr)
- Italy: Non-EU International Trade (May)
- Mexico: Economic Activity (Apr), Construction (Apr)
- more updates...
Economy in Brief
Italian Consumer Confidence Remains Hammered Down
Italy's consumer confidence fell month-to-month...
U.S. Current Account Deficit Deepens to Record in Q1'22
The U.S. current account deficit deepened to $291.4 billion during Q1'22...
Kansas City Fed Manufacturing Index Declines Further in June But Remains Positive
The Kansas City Fed reported that its manufacturing sector business activity index fell to 12 in June...
U.S. Unemployment Claims Edged Down
Initial claims for unemployment insurance filed in the week ended June 18 declined by 2,000 to 229,000...
U.S. Energy Prices Reverse Earlier Gains
Retail gasoline prices surged to $5.01 per gallon (63.1% y/y)...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller June 26, 2020
• Spending rebound follows two sharp monthly declines.
• Personal income drop reflects lessened government support.
• Price inflation is minimal.
Personal consumption expenditures increased 8.2% during May (-9.3% y/y) following declines of 12.6% during April and 6.6% in March, revised from -13.6% and -6.9%. These shortfalls reflected business closures and government stay-at-home guidelines. An 8.7% increase had been expected in the Action Economics Forecast Survey. In constant dollars, total spending rebounded 8.1% last month (-9.8% y/y). Real durable goods spending jumped 28.4% (2.4% y/y) during May after falling 11.3% in April. Spending on motor vehicles rebounded by 37.5% (-0.1% y/y) after falling for five straight months. Home furniture & appliance buying surged 23.3% (1.9% y/y) and made up declines in the prior two months while recreational goods & vehicles outlays surged 24.3% (20.3% y/y) to a record high. Real nondurable goods buying increased 7.9% (-0.6% y/y) after declining 13.3% in April. The increase reflected a 43.5% surge (-22.6% y/y) in sales of clothing & shoes after two months of sharp decline. Gasoline & oil sales recovered 23.9% (-16.7% y/y) and made up for the prior month's weakness when driving was diminished. Food & beverage purchases rose 2.4% (7.9% y/y) after declining 14.2% in April. Real spending on services improved 5.2% (-14.3% y/y) after plunging a record 12.0% in April. The increase was led by a 23.7% rise (-22.7% y/y) in outlays on health care and a 20.3% increase (-36.6% y/y) in spending on transportation. Sales of recreation services improved 4.5% (-56.0% y/y) following two monthly declines totaling 58.7%. Spending at restaurants & hotels recovered 24.3% (-40.9% y/y) which came after a sharp reduction in the prior two months. These increases were tempered by a 0.2% slip (+1.7% y/y) in outlays on housing & utilities.
Personal income declined 4.2% (+7.0% y/y) after surging a little-revised 10.8% in April. A 5.7% decline had been expected. The decline reflected a 17.3% falloff (+68.6% y/y) in government transfer payments as economic impact payments slid 76.6%. Wages & salaries improved 2.7% (-5.7% y/y) after declining 7.6% and 3.7% in April & March, respectively, with the record reductions in employment. Proprietors income improved 2.8% (-10.9% y/y) after falling sharply for two straight months. Rental incomes improved 0.2% (2.8% y/y). Receipts on assets eased 1.4% (-3.7% y/y), due to roughly 1.5% declines in both personal interest & dividend income.
Disposable personal income declined 4.9% (+8.8% y/y) last month after rising 13.1% in April. Adjusted for price inflation, take-home pay decreased 5.0% (+8.2% y/y) after rising 13.6% in April.
Last month's strength in spending relative to income lowered the personal savings rate to 23.2% from the record 32.2% in April. The level of personal saving rose by 224.9% y/y.
The PCE chain price index edged 0.1% higher last month (0.5% y/y) after falling 0.5%. The price index excluding food & energy also rose 0.1% (1.0% y/y). Motor vehicle prices rose 0.5% (-2.3% y/y) and home furnishings & appliance prices improved 0.1% (-0.3% y/y). Apparel costs dropped 2.4% (-7.5% y/y). Gasoline & oil prices were off 3.6% (-33.6% y/y). Services costs improved 0.2% (1.8% y/y). Housing & utilities prices rose 0.2% (2.8% y/y) and health care prices edged 0.1% higher (2.2% y/y). Energy prices were off 1.7% (-18.5% y/y), the fifth straight monthly decline. Food prices rose 0.8% (4.5% y/y).
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 AS1REP NA database
Personal Income & Outlays (%) | May | Apr | Mar | May Y/Y | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|
Personal Income | -4.2 | 10.8 | -2.2 | 7.0 | 4.4 | 5.6 | 4.7 |
Wages & Salaries | 2.7 | -7.6 | -3.7 | -5.7 | 4.7 | 5.0 | 4.7 |
Disposable Personal Income | -4.9 | 13.1 | -2.1 | 8.8 | 4.3 | 6.1 | 4.7 |
Personal Consumption Expenditures | 8.2 | -12.6 | -6.6 | -9.3 | 4.0 | 5.2 | 4.4 |
Personal Saving Rate | 23.2 | 32.2 | 12.6 | 7.8 (May '19) | 7.9 | 7.7 | 7.0 |
PCE Chain Price Index | 0.1 | -0.5 | -0.2 | 0.5 | 1.4 | 2.1 | 1.8 |
Less Food & Energy | 0.1 | -0.4 | -0.1 | 1.0 | 1.6 | 2.0 | 1.6 |
Real Disposable Income | -5.0 | 13.6 | -1.8 | 8.2 | 2.9 | 4.0 | 2.9 |
Real Personal Consumption Expenditures | 8.1 | -12.2 | -6.4 | -9.8 | 2.6 | 3.0 | 2.6 |