Recent Updates
- US: Consumer Sentiment (Feb-final), Chicago PMI (Feb),Personal Income, Adv Trade & Inventories (Jan)
- US: Consumer Sentiment Detail (Feb-final)
- Canada: Industrial Product Prices (Jan)
- UK: Motor Vehicle Production (Jan)
- more updates...
Economy in Brief
Chicago Business Barometer Declines Sharply in February
The ISM-Chicago Purchasing Managers Business Barometer fell 4.3 points in February to 59.5...
Goods Trade Deficit Widened Slightly in January
The advance estimate of the U.S. trade deficit in goods widened slightly to $83.74 billion in January..
Japan's Industrial Sector Mounts a Comeback
Japan's IP surged in January gaining 4.3% compared to December...
Aircraft Orders Boost U.S. Durable Goods Orders in January
Manufacturers' orders for durable goods increased a much larger-than-expected 3.4% m/m (4.5% y/y) in January...
Kansas City Fed Manufacturing Index Increases Again in February
The Kansas City Fed reported that its manufacturing sector business activity index rose to 24 in February...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller January 29, 2021
• Spending on durable & nondurable goods moves sharply lower.
• Wage growth remains moderate.
• Pricing power increases.
Consumers remained cautious last month. Personal consumption expenditures declined 0.2% (-2.0% y/y) during December following a 0.7% November shortfall, revised from -0.4%. October's 0.3% rise was unrevised. A 0.5% December decline had been expected in the Action Economics Forecast Survey. Adjusted for price inflation, spending decreased 0.6% (-3.3% y/y) in December after falling 0.7% in November. The fall in spending reflected a 1.3% decline (+9.5% y/y) in outlays on durable goods, led by a 5.1% fall (+15.6% y/y) in spending on recreational goods & vehicles. Home furnishings & appliance spending fell 2.1% (+6.4% y/y). These declines were offset by a 3.0% increase (8.0% y/y) in motor vehicles sales which followed a 2.3% drop. Nondurable goods purchases fell 1.4% (+3.4% y/y), down for the third straight month. Clothing spending weakened 2.7% (-4.6% y/y) after falling 5.4% in November. Food & beverage sales were off 1.9% (+5.1% y/y) while spending on gasoline eased 0.7% (-9.0% y/y), down for the fourth month in the last five. Real outlays on services eased 0.2% (-7.2% y/y) as restaurant & hotel spending weakened 4.4% (-25.0% y/y), about as it did in November. Health care outlays fell 0.7% (-5.1% y/y). Recreation services spending held steady (-33.1% y/y) while housing & utilities spending rose 0.8% (1.5% y/y).
Personal income increased 0.6% (4.1% y/y) last month after falling 1.3% during November, revised from -1.1%, and 0.7% in October, revised from -0.6%. A 0.1% uptick had been expected. Wages & salaries improved 0.5% (2.3% y/y) after a 0.4% rise. These were notably lower than the sharper increases in each of the prior six months. Proprietors' income declined 4.5% (-3.2% y/y), down sharply for the second straight month. Rental income eased 0.2% (+0.7% y/y). Income from assets improved 2.0% (-1.2% y/y) as dividend income strengthened 4.6% (3.3% y/y). Transfer payments rose 2.3% (20.5% y/y). Unemployment insurance payments rose 14.3% after falling sharply for five consecutive months. Disposable personal income rose 0.6% (4.7% y/y) last month after declining for two months. Adjusted for price inflation, real disposable income rose 0.2% (3.3% y/y) after falling 1.5%.
Last month's decline in spending which accompanied the gain in income raised the personal saving rate to 13.7% from 12.9% in November. The rate reached a record high 33.7% in April. The level of personal saving rose 6.8% (99.2% y/y).
The PCE chain price index increased 0.4% (1.3% y/y) in December following two months of stability. The price index excluding food and energy rose 0.3% (1.5% y/y), also following two months of remaining unchanged. Energy prices jumped 4.2% (-7.6% y/y) after edging 0.4% higher in November. Food & beverage prices rose 0.2% (3.9% y/y) after slipping 0.1%.
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.
How Accurate Are Long-Run Employment Projections? from the Federal Reserve Bank of Philadelphia is available here.
Personal Income & Outlays (%) | Dec | Nov | Oct | Dec Y/Y | 2020 | 2019 | 2018 |
---|---|---|---|---|---|---|---|
Personal Income | 0.6 | -1.3 | -0.7 | 4.1 | 6.3 | 3.9 | 5.3 |
Wages & Salaries | 0.5 | 0.4 | 0.8 | 2.3 | 0.6 | 4.7 | 5.0 |
Disposable Personal Income | 0.6 | -1.5 | -0.8 | 4.7 | 7.2 | 3.7 | 5.8 |
Personal Consumption Expenditures | -0.2 | -0.7 | 0.3 | -2.0 | -2.7 | 3.9 | 4.9 |
Personal Saving Rate | 13.7 | 12.9 | 13.6 | 7.2 (Dec. '19) | 16.2 | 7.5 | 7.8 |
PCE Chain Price Index | 0.4 | 0.0 | 0.0 | 1.3 | 1.2 | 1.5 | 2.1 |
Less Food & Energy | 0.3 | 0.0 | 0.0 | 1.5 | 1.4 | 1.7 | 2.0 |
Real Disposable Income | 0.2 | -1.5 | -0.8 | 3.3 | 6.0 | 2.2 | 3.6 |
Real Personal Consumption Expenditures | -0.6 | -0.7 | 0.2 | -3.3 | -3.9 | 2.4 | 2.7 |