U.S. Personal Income and Spending Gains Slow; Pricing Power Is Weak

Personal income rose 0.2% during November (4.2% y/y) following an unrevised 0.5% October increase. A 0.3% gain was expected in the Action Economics Forecast Survey. Leading last month's rise was a 1.0% hop (5.3% y/y) in proprietors' income which came after a 1.3% jump. Wages & salaries rose a lessened 0.2% (4.2% y/y), the weakest rise in six months. Income from assets held steady (3.5% y/y) after a 0.3% rise, reflecting a 0.4% dividend decline (+3.8% y/y) and a 0.3% gain (3.2% y/y) in interest income. Rental income increased 0.5% (4.8% y/y), the same as during October. Transfer payments edged 0.1% higher (5.2% y/y) reflecting a 0.4% decline (+5.7% y/y) in social security payments. Medicare receipts rose 0.9% (7.5% y/y) but Medicaid income inched just 0.1% higher (4.8% y/y). Veterans benefits rose 0.4% (10.9% y/y) while unemployment insurance benefits eased 0.4% (-16.7% y/y).

Disposable personal income gained 0.2% (4.7% y/y) following a 0.5% increase. When adjusted for higher prices, disposable income also rose 0.2% (2.8% y/y).

Personal consumption expenditures improved by a lessened 0.4% last month (4.7% y/y) after a 0.8% increase. A 0.3% rise had been expected. Adjusted for higher prices, personal outlays rose 0.3% (2.8% y/y). Real durable goods outlays increased 0.9% (3.8% y/y) led by a 1.9% rise (8.9% y/y) in recreational goods & vehicles. Home furnishings & appliance buying increased 1.3% (4.1% y/y) but motor vehicle expenditures declined 0.4% (-2.2% y/y). Real outlays on nondurable goods increased 0.6% (3.2% y/y) as fuel outlays edged 0.1% higher (-0.8% y/y). Clothing spending jumped 1.6% (4.6% y/y) and spending at restaurants rose 0.3% (2.7% y/y). Real services outlays gained a lessened 0.2% (2.6% y/y). Spending on housing & utilities rose a steady 0.6% (2.4% y/y) while financial services & insurance payments gained 0.4% (0.9% y/y). Recreation services spending decreased 0.8% (+1.4% y/y) while spending at restaurants fell 0.7% (+3.5% y/y). Health care outlays rose 0.3% (2.9% y/y).

The personal savings rate eased to 6.0%, the lowest level since March 2013. It has been falling steadily since the February high of 7.4%. The level of personal savings increased a paltry 1.7% y/y.

The personal consumption chain price index rose 0.1% (1.8% y/y) after a 0.2% rise. The index excluding food & energy also rose 0.1% (1.9% y/y) for a second month.

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.