Global| Aug 30 2013U.S. Personal Income and Spending Moderate; Wage Income Falls
by:Tom Moeller
|in:Economy in Brief
Summary
Personal income in July matched expectations and ticked 0.1% higher (3.3% y/y) following an unrevised 0.3% June rise. May's increase was, however, reduced to 0.3% from 0.4%. Holding back income's increase was a 0.3% decline (+3.4% [...]
Personal income in July matched expectations and ticked 0.1% higher (3.3% y/y) following an unrevised 0.3% June rise. May's increase was, however, reduced to 0.3% from 0.4%. Holding back income's increase was a 0.3% decline (+3.4% y/y) in wage & salaries, the first drop in six months. Offsetting some of this drop was a 1.3% gain (10.0% y/y) in rental income and a 0.6% increase (8.8% y/y) in proprietors' earnings. Dividend income jumped 2.2% (11.1% y/y) but interest earnings fell 0.3% (+1.3% y/y). Transfer receipts gained 0.2% (3.4% y/y). Disposable personal income gained 0.2% (2.2% y/y). Adjusted for price changes, disposable income ticked 0.1% higher (0.8% y/y).
Personal consumption expenditures notched up 0.1% (3.1% y/y) last month after a 0.6% gain in June, revised from 0.5%. The gain fell short of expectations for a 0.3% rise. A 0.2% decline (+5.7% y/y) in spending on durable goods reflected a 0.4% drop (+7.8% y/y) in motor vehicle purchases. Home furnishings purchases also fell 0.6% (+3.4% y/y) but spending on apparel gained 0.6% (2.5% y/y). Spending on gasoline rose 1.8% (6.7% y/y) but the gain was just 0.8% (1.7% y/y) in real terms. Spending on services was roughly unchanged (2.5% y/y). Adjusted for price changes, personal consumption was unchanged (1.7% y/y).
The personal savings rate held steady at 4.4%, down from 5.1% in July of last year. The total value of personal savings has fallen 13.1% during the last twelve months.
The PCE chain price index bumped 0.1% higher (1.4% y/y) in July after a 0.4% rise. Durable goods prices fell 0.3% (-1.8% y/y) but nondurable goods prices rose 0.3% (1.3% y/y) after June's 1.1% jump. Services prices rose 0.1% (2.0% y/y).
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 (%) | Jul | Jun | May | Y/Y | 2012 | 2011 | 2010 |
|---|---|---|---|---|---|---|---|
| Personal Income | 0.1 | 0.3 | 0.3 | 3.3 | 4.2 | 6.1 | 2.9 |
| Wages & Salaries | -0.3 | 0.4 | 0.2 | 3.4 | 4.3 | 4.1 | 2.0 |
| Disposable Personal Income | 0.2 | 0.2 | 0.3 | 2.2 | 3.9 | 4.8 | 2.8 |
| Personal Consumption Expenditures | 0.1 | 0.6 | 0.2 | 3.1 | 4.1 | 5.0 | 3.8 |
| Personal Saving Rate | 4.4 | 4.4 | 4.6 | 5.1 (Jul'12) |
5.6 | 5.7 | 5.6 |
| PCE Chain Price Index | 0.1 | 0.4 | 0.1 | 1.4 | 1.8 | 2.4 | 1.7 |
| Less Food & Energy | 0.1 | 0.2 | 0.1 | 1.2 | 1.7 | 1.4 | 1.3 |
| Real Disposable Income | 0.1 | -0.2 | 0.2 | 0.8 | 1.7 | 2.4 | 1.1 |
| Real Personal Consumption Expenditures | 0.0 | 0.2 | 0.1 | 1.7 | 2.2 | 2.5 | 2.0 |
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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