Global| Jan 30 2012U.S. Consumers Choose To Save Income Gain
by:Tom Moeller
|in:Economy in Brief
Summary
For the first time in six months, individuals made a meaningful effort to save rather spend a firm gain in income. The personal savings rate rose to 4.0% last month from an unrevised 3.5% in November. To be sure, it wasn't a great [...]
For the first time in six months, individuals made a
meaningful effort to save rather spend a firm gain in income. The personal
savings rate rose to 4.0% last month from an unrevised 3.5% in
November. To be sure, it wasn't a great effort. While the rate's increase
was the first of meaning since June, it remained below 5.2% one year ago
and the Q4 average of 3.7% was the lowest since 2007.
Personal income rose 0.5% following an unrevised 0.1% November uptick. The latest beat Consensus expectations for a 0.4% rise. Wage & salary disbursements increased 0.4% (3.8% y/y) after a negligible November dip. A 1.9% jump (23.2% y/y) in rental income added to that increase while dividend income gained 1.5% (7.5% y/y). To the downside, interest income fell 0.3% (-2.9% y/y), off for the sixth straight month. Disposable income increased 0.4% (2.3% y/y). Adjusted for prices, disposable income increased 0.3% m/m but slipped 0.1% y/y despite the gains in payroll employment.
Personal consumption expenditures slipped marginally (3.9% y/y), essentially flat for the third consecutive month. Expectations had been for a 0.1% rise. The increase was held back by a 0.4% decline in nondurables which again reflected lower gasoline prices. Food consumption also fell 0.6% (+5.3% y/y) while spending of clothing was unchanged (4.1% y/y). Spending of durable goods also was weak and fell 0.4% (+5.5% y/y) as spending on recreational goods fell 1.5% (+3.1% y/y) and outlays on home furnishings slipped marginally (+4.8% y/y). Motor vehicle outlays rose 0.2% (7.9% y/y). Adjusted for price inflation spending slipped 0.1% last month (+1.4% y/y).
The PCE chain price index rose just 0.1% last month (2.4% y/y), the gain held back by a 1.9% drop (+10.9%) in gasoline prices. The core PCE price deflator rose 0.2%. The y/y increase of 1.8% was up from the record low 12-month change of 0.9% reached last December. Notable amongst the categories last month was a 5.0% y/y gain in food & beverage costs and a 4.5% y/y rise in clothing prices. In the durables sector, recreational goods prices posted a 6.2% y/y decline. Motor vehicle prices rose 3.2% y/y while furniture & appliance prices rose 0.1% y/y.
The personal income & consumption figures are available in Haver's USECON and USNA databases. The expectations figures are in the AS1REPNA database.
| Personal Income
& Outlays (%) |
Dec | Nov | Oct | Y/Y | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| Personal Income | 0.5 | 0.1 | 0.4 | 3.8 | 4.7 | 3.7 | -4.3 |
| Wages & Salaries | 0.4 | -0.0 | 0.6 | 3.8 | 3.6 | 2.2 | -4.3 |
| Disposable Personal Income |
0.4 | -0.0 | 0.2 | 2.3 | 3.4 | 3.6 | -2.1 |
| Personal Consumption Expenditures |
-0.0 | 0.1 | 0.1 | 3.9 | 4.7 | 3.8 | -1.7 |
| Saving Rate | 4.0 | 3.5 | 3.6 | 5.2 (Dec'10) |
4.4 | 5.3 | 5.1 |
| PCE Chain Price Index | 0.1 | -0.0 | -0.1 | 2.4 | 2.4 | 1.8 | 0.2 |
| Less Food & Energy | 0.2 | 0.1 | 0.1 | 1.8 | 1.4 | 1.4 | 1.6 |
| Real Disposable Income |
0.3 | -0.0 | 0.3 | -0.1 | 0.9 | 1.8 | -2.3 |
| Real Personal Consumption Expenditures |
-0.1 | 0.1 | 0.1 | 1.4 | 2.2 | 2.0 | -1.9 |
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.
