Global| Aug 02 2005June Growth in U.S. Personal Income Firm
by:Tom Moeller
|in:Economy in Brief
Summary
June personal income rose 0.5% following an unrevised 0.2% gain in May. Consensus expectations had been for a 0.4% increase. The strength in the total's rise owed to a 2.0% (6.1% y/y) increase in proprietors' income. Higher receipts [...]
June personal income rose 0.5% following an unrevised 0.2% gain in May. Consensus expectations had been for a 0.4% increase. The strength in the total's rise owed to a 2.0% (6.1% y/y) increase in proprietors' income.
Higher receipts from assets also lifted earnings last month as interest income rose 1.5% (4.3% y/y) and dividend income rose 0.8% (9.5% y/y).
Wages & salaries rose a modest 0.2% (7.4% y/y) following a slim 0.1% gain in May. Factory sector wages fell 0.2% (5.7% y/y) though service sector wages rebounded 0.3% (8.8% y/y) following no change the prior month.
Disposable personal income jumped 0.5% (5.3% y/y) following a 0.2% increase in May. Adjusted for price inflation take home pay rose 0.5% (2.9% y/y) though upward revisions to pricing lowered slightly recent y/y gains.
Matching Consensus expectations, personal consumption expenditures surged 0.8% on the strength of higher sales of light vehicles. Spending on durables overall reversed the May decline with a 2.9% (8.0% y/y) increase. Nondurables spending rose a moderate 0.7% (7.3% y/y) and spending on services increased 0.5% (6.2% y/y).
The personal savings rate fell to 0.0% though the household sector's net worth (from the Flow of Funds Accounts) has been rising, helped by a 16% increase in owners' equity in real estate.
The PCE chain price index fell slightly due to a 0.3% decline in gasoline prices which subsequently rose 6.2% in July. In August, gas prices are about equal to the prior month's average of $2.29. Less food & energy, prices also were unchanged as durable goods prices fell 0.4% (-0.5% y/y) and services prices increased a moderate 0.2% (2.9% y/y).
Closing the Gap from the Federal Reserve Bank of St. Louis is available here.
| Disposition of Personal Income | June | May | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Personal Income | 0.5% | 0.2% | 6.6% | 5.9% | 3.2% | 1.8% |
| Personal Consumption | 0.8% | -0.0% | 6.7% | 6.5% | 4.9% | 4.2% |
| Savings Rate | 0.0% | 0.4% | 1.5% | 1.7% | 2.1% | 2.4% |
| PCE Chain Price Index | -0.0% | 0.0% | 2.2% | 2.6% | 1.9% | 1.4% |
| Less food & energy | 0.0% | 0.2% | 1.9% | 2.0% | 1.3% | 1.8% |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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