Global| Jun 28 2002Personal Income Up, Spending Down
by:Tom Moeller
|in:Economy in Brief
Summary
Personal income rose as expected last month following a slight downward revision to April. Personal consumption expenditures fell as expected. April's gain was unrevised. Wage and salary disbursements rose 0.4% (1.9% y/y) in May, the [...]
Personal income rose as expected last month following a slight downward revision to April. Personal consumption expenditures fell as expected. April's gain was unrevised.
Wage and salary disbursements rose 0.4% (1.9% y/y) in May, the strongest monthly increase this year, following no change in April.
Personal spending fell due to lower spending on both durable and nondurable goods. Unit sales of light vehicles fell 9.5% m/m to 15.6M. Spending on services rose 0.7% (5.2% y/y).
Disposable income rose 0.3% (5.8% y/y), the same as in April.
The PCE price deflator fell (1.0% y/y) for the first month since December. Less food and energy the price deflator also fell but more slightly (1.6% y/y) following an unrevised 0.2% April increase.
| Disposition of Personal Income | May | April | Y/Y | 2001 | 2000 | 1999 |
|---|---|---|---|---|---|---|
| Personal Income | 0.3% | 0.2% | 3.0% | 4.9% | 7.0% | 4.7% |
| Personal Consumption | -0.1% | 0.5% | 4.0% | 5.0% | 7.7% | 6.7% |
| Savings Rate | 3.1% | 2.8% | 1.1% | 1.6% | 1.0% | 2.4% |
| PCE Price Deflator | -0.1% | 0.4% | 1.0% | 1.9% | 2.7% | 1.6% |
by Tom Moeller June 28, 2002
The June reading of Consumer Sentiment from the University of Michigan came in higher than suggested by a lower reading in mid-June. A full-month figure of 90.8 had been expected.
Nevertheless, sentiment remained near the low end of 90.7-96.9 range it has fluctuated in this year.
Indexes of both expectations and current conditions fell.
The University of Michigan survey is not seasonally adjusted.
During the past five years there has been a 37% correlation between the level of consumer sentiment and the 3-month change in real PCE.
| Univ. of Michigan | June | May | Y/Y | 2001 | 2000 | 1999 |
|---|---|---|---|---|---|---|
| Consumer Sentiment | 92.4 | 96.9 | -0.2% | 89.2 | 107.6 | 105.8 |
by Tom Moeller June 28, 2002
The Chicago Purchasing Manager’s Index of Business activity fell slightly more than expected in June. Nevertheless, the index remained at its second highest level of the year.
The index of new orders fell, but production, inventories and employment rose.
The index of vendor performance fell, indicating that supplier delivery speeds quickened after a sharp slowing in May.
The prices paid index was roughly unchanged.
| Chicago Purchasing Managers Index, SA | June | May | Y/Y | 2001 | 2000 | 1999 |
|---|---|---|---|---|---|---|
| Business Barometer | 58.2 | 60.8 | 42.6 | 41.4 | 51.8 | 56.5 |
| Prices Paid | 58.2 | 58.3 | 50.9 | 50.5 | 65.6 | 57.6 |
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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