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Economy in Brief
UK Consumer Sentiment Hits Lowest Reading since 1996
(when the GFK survey began; also lowest reading 'ever')
Of these 13 readings eight of them declined on the month in May three of them improved and two of them were unchanged...
U.S. Existing Home Sales Continue to Fall in April as Houses Become Less Affordable
The combination of soaring home prices across the nation and rising interest rates is making homes less affordable...
U.S. Index of Leading Indicators Fell in April
Five of the index's components fell in April, one was unchanged and four increased...
U.S. Unemployment Claims Rose in the Latest Week
The state insured rates of unemployment in regular programs vary widely...
CBI Gauge in the UK Continues to Be Upbeat
The global economy has a lot of challenges...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
Profits and Margins Plunge In Q1: Expect More Margin Contraction As Fed Squeezes Inflation
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation and Fed Policy: A Relationship which Should Worry the Fed and Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
by Tom Moeller March 31, 2022
• Goods spending declines but services improves.
• Core price inflation eases m/m.
• Wage & salary growth strengthens.
Personal consumption expenditures rose 0.2% (13.7% y/y) during February after strengthening 2.7% in January, revised from 2.1%. A 0.6% rise had been expected in the Action Economics Forecast Survey. Adjusted for price inflation, spending declined 0.4% last month (+6.9% y/y) after increasing 2.1% in January.
Real spending on durable goods declined 2.5% in February (+5.2% y/y) after January's 10.1% surge. The decline reflected a 4.0% drop (-2.8% y/y) in real outlays on motor vehicles & parts after surging 11.8% in January. Real furniture & appliance outlays weakened 2.8% (+0.8% y/y) after an 8.4% January rise. Real outlays on recreational goods & vehicles declined 2.3% (+14.7% y/y) following an 11.6% surge. Real nondurable goods buying fell 1.9% in February (+6.4% y/y) after a 3.1% gain. Adjusted for inflation, clothing outlays declined 2.1% (+15.6% y/y) after a 7.1% January rise. Real food & beverage expenditures fell 2.3% in February (+0.9% y/y) after a 1.9% increase, and real spending on gasoline & other energy products eased 0.1% (+11.1% y/y). Real outlays on services improved 0.6% (7.4% y/y) in February after a 0.3% increase. Housing & utilities spending fell 0.5% (+0.6% y/y) as it followed a 1.0% rise. Real outlays on recreation services offset that decline and surged 1.9% (24.4% y/y) after weakening modestly in the prior two months. Real spending at hotels & restaurants jumped 2.4% last month (24.7% y/y) after falling 1.3% in January.
Prices marched higher last month. The PCE chain price index rose 0.6% in February (6.4% y/y) following two months of 0.5% increase. The price index excluding food and energy rose 0.4%. The 5.4% y/y increase was the largest since April 1983. Durable goods prices held steady (11.4% y/y). The nondurables goods price index strengthened 1.8% (8.6% y/y) after rising 0.7% in January as gasoline & oil costs surged 6.7% (36.4% y/y) after a 0.2% dip. The services price index rose 0.3% last month (4.6% y/y) after two months of 0.4% gain.
Personal income rose an expected 0.5% (6.0% y/y) during February following a 0.1% rise, revised from no change. Wages & salaries increased 0.8% last month (11.5% y/y) after rising 0.4% in January. Proprietors income rose 0.8% (10.0% y/y) after improving 0.2%. Rental income rose 0.7% (5.6% y/y) for the second straight month. Transfer receipts declined 0.3% (-5.4% y/y) after falling 1.0% in January. Disposable income increased 0.4% (4.6% y/y) in February, after rising 0.1% in January. Adjusted for price inflation, disposable income declined 0.2% (-1.6% y/y), off for the seventh straight month.
The personal savings rate rose to 6.3% in February from 6.1% in January. It remained down from a high of 33.8% in April of 2020. The level of personal savings rose 3.5% last month but has fallen by roughly one-half during the last twelve months.
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.
Why Is U.S. Inflation Higher than in Other Countries? from the Federal Reserve Bank of San Francisco is available here.
Personal Income & Outlays (%) | Feb | Jan | Dec | Feb Y/Y | 2021 | 2020 | 2019 |
---|---|---|---|---|---|---|---|
Personal Income | 0.5 | 0.1 | 0.4 | 6.0 | 7.4 | 6.5 | 4.1 |
Wages & Salaries | 0.8 | 0.4 | 0.7 | 11.5 | 9.4 | 1.3 | 4.8 |
Disposable Personal Income | 0.4 | 0.1 | 0.3 | 4.6 | 6.1 | 7.5 | 3.8 |
Personal Consumption Expenditures | 0.2 | 2.7 | -0.9 | 13.7 | 12.1 | -2.6 | 3.7 |
Personal Saving Rate | 6.3 | 6.1 | 8.4 | 13.5 (Feb. '21) | 12.3 | 16.6 | 7.6 |
PCE Chain Price Index | 0.6 | 0.5 | 0.5 | 6.4 | 3.9 | 1.2 | 1.5 |
Less Food & Energy | 0.4 | 0.5 | 0.5 | 5.4 | 3.3 | 1.4 | 1.7 |
Real Disposable Income | -0.2 | -0.4 | -0.2 | -1.6 | 2.2 | 6.2 | 2.3 |
Real Personal Consumption Expenditures | -0.4 | 2.1 | -1.4 | 6.9 | 7.9 | -3.8 | 2.2 |