Global| May 26 2006U.S. Personal Income Gain Light, Wages Soared, Prices Up
by:Tom Moeller
|in:Economy in Brief
Summary
Personal income rose 0.5% last month following a downwardly revised 0.5% gain during March. The latest compared to Consensus expectations for a 0.7% increase. Wage & salary disbursements soared 0.9% (5.3% y/y) following an upwardly [...]
Personal income rose 0.5% last month following a downwardly revised 0.5% gain during March. The latest compared to Consensus expectations for a 0.7% increase.
Wage & salary disbursements soared 0.9% (5.3% y/y) following an upwardly revised 0.5% March increase. Private sector wages jumped 1.0% (5.7% y/y) as strong gains were logged in manufacturing (0.7%, 2.8% y/y) and in service producing industries (1.1%, 6.1% y/y).
Government transfer payments for health insurance & disability rose 0.6% (11.4% y/y) and a March surge was revised down.
Disposable personal income increased 0.4% (4.7% y/y) but a revised 0.4% gain in March was half that initially reported. Personal taxes jumped 1.6% (10.7% y/y).
Personal consumption matched Consensus expectations for a 0.6% rise. Adjusted for price inflation, spending rose 0.1% (3.1% y/y) for the second consecutive month. Real spending on gasoline & oil jumped 1.7% (0.8% y/y) following two months of decline.
The PCE chain price index rose 0.5% boosted by an 8.7% (19.1% y/y) surge in gasoline & oil prices. Less food & energy the chain price index increased 0.2% (2.1% y/y), down from the 0.3% gain in March. Prices for clothing & shoes rose 0.4% (-0.7% y/y) but furniture & household equipment prices fell another 0.4% (-4.8% y/y).
The personal savings rate was a negative 1.6% in April and recent figures were revised more negative.
The Trend Growth Rate of Employment: Past, Present and Future from the Federal Reserve Bank of Kansas City is available here.
| Disposition of Personal Income | April | Mar | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| Personal Income | 0.5% | 0.5% | 5.4% | 5.4% | 5.9% | 3.2% |
| Personal Consumption | 0.6% | 0.5% | 6.2% | 6.5% | 6.5% | 4.9% |
| Savings Rate | -1.6% | -1.4% | -0.2% (April '05) | -0.5% | 1.7% | 2.1% |
| PCE Chain Price Index | 0.5% | 0.4% | 2.9% | 2.8% | 2.6% | 1.9% |
| Less food & energy | 0.2% | 0.3% | 2.1% | 2.0% | 2.0% | 1.3% |
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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