Global| Nov 26 2014U.S. Personal Income and Spending Growth Remain Moderate
by:Tom Moeller
|in:Economy in Brief
Summary
Overall personal income increased 0.2% during October (4.1% y/y) after an unrevised 0.2% September rise. The increase disappointed expectations for a 0.4% improvement in the Action Economics Forecast Survey. Wages & salaries earnings [...]
Overall personal income increased 0.2% during October (4.1% y/y) after an unrevised 0.2% September rise. The increase disappointed expectations for a 0.4% improvement in the Action Economics Forecast Survey. Wages & salaries earnings improved 0.3% (4.4% y/y) while proprietors income jumped 0.5% (3.3% y/y). Rental income gained 0.4% (7.1% y/y) but personal transfer receipts slipped 0.1% (5.5% y/y), held back by a 0.4% decline (+14.1% y/y) in Medicare income. Earnings from dividends jumped 0.6% (5.1% y/y) but interest income fell 0.2% (+0.1% y/y), down for the fourth straight month. Disposable income increased 0.2% (3.9% y/y) and in real terms it ticked 0.1% higher (2.5% y/y).
Personal consumption expenditures increased 0.2% (3.6% y/y) following no change in September, revised from down 0.2%. A 0.3% increase had been expected. Motor vehicle purchases fell 1.7% (+7.0% y/y) following a 4.5% decline while spending on furnishings & durable household equipment improved 0.4% (2.6% y/y) after a 0.3% gain. Apparel purchases jumped 0.8% (2.0% y/y) after a 0.4% shortfall and spending on gasoline fell 2.0% (-4.7% y/y) with lower prices. Services spending added 0.3% (3.8% y/y) for a second month, driven by a 0.9% rise (6.9% y/y) in restaurants and accommodations. In constant dollars, overall spending increased 0.2% (2.2% y/y).
The equal gains in income and spending left the personal saving rate stable at 5.0%, though September's rate was revised down from 5.6%. Personal savings fell 0.4% (+10.5% y/y) following a 1.3% rise.
The chain price index nudged 0.1% higher last month (1.4% y/y), repeating a 0.1% uptick. Energy prices fell 2.0% (-1.9% y/y) while food prices were roughly unchanged (2.5% y/y). Durable goods prices also were roughly unchanged (-2.2% y/y) while nondurables prices fell 0.4% (+0.8% y/y). Gasoline prices declined 3.0% (-4.8% y/y). Services prices gained 0.2% (2.3% y/y). The price index excluding food & energy improved 0.2% (1.6% y/y) following three straight 0.1% upticks.
The personal income & consumption figures are available in Haver's USECON and USNA databases. The consensus expectation figure is in the AS1REPNA database.
| Personal Income & Outlays (%) | Oct | Sep | Aug | Y/Y | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| Personal Income | 0.2 | 0.2 | 0.4 | 4.1 | 2.2 | 5.2 | 6.2 |
| Wages & Salaries | 0.3 | 0.2 | 0.5 | 4.4 | 2.8 | 4.5 | 4.0 |
| Disposable Personal Income | 0.2 | 0.1 | 0.3 | 3.9 | 1.0 | 4.9 | 5.0 |
| Personal Consumption Expenditures | 0.2 | 0.0 | 0.5 | 3.6 | 3.6 | 3.7 | 4.8 |
| Personal Saving Rate | 5.0 | 5.0 | 4.9 | 4.7 (Oct. '13) |
4.9 | 7.2 | 6.0 |
| PCE Chain Price Index | 0.1 | 0.1 | -0.0 | 1.4 | 1.2 | 1.8 | 2.5 |
| Less Food & Energy | 0.2 | 0.1 | 0.1 | 1.6 | 1.3 | 1.8 | 1.5 |
| Real Disposable Income | 0.1 | 0.1 | 0.3 | 2.5 | -0.2 | 3.0 | 2.5 |
| Real Personal Consumption Expenditures | 0.2 | -0.0 | 0.6 | 2.2 | 2.4 | 1.8 | 2.3 |
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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