Global| May 01 2017U.S. Personal Income Growth Slows While Spending Is Unchanged
by:Tom Moeller
|in:Economy in Brief
Summary
Personal income increased 0.2% during March following a 0.3% February rise, revised from 0.4%. A 0.3% increased had been expected in the Action Economics Forecast Survey. The 4.5% y/y gain compared to 3.6% growth during all of 2016. [...]
Personal income increased 0.2% during March following a 0.3% February rise, revised from 0.4%. A 0.3% increased had been expected in the Action Economics Forecast Survey. The 4.5% y/y gain compared to 3.6% growth during all of 2016. Wages & salaries ticked 0.1% higher (5.5% y/y), the weakest increase since August. Rental incomes remained strong and posted a 0.7% increase (5.6% y/y). Proprietors' income gained 0.6% (4.2% y/y). Transfer receipts rose 0.4% (3.8% y/y) as Social Security payments strengthened 0.8% (3.8% y/y). Medicare receipts rose 0.4% (4.5% y/y) and Medicaid payments notched 0.1% higher (4.9% y/y). Personal interest income rose 0.4% (4.1% y/y) for the third straight month and dividend income edged 0.1% higher (0.6% y/y).
Disposable personal income increased 0.2% (4.3% y/y) following three months of 0.3% gain. A decline in the price index left real disposable earnings up 0.5% (2.4% y/y), the strongest increase since December 2015.
The PCE chain price index declined 0.2% following a 0.1% rise. It was the first decline since February 2016. The y/y gain eased to 1.8%. The price index excluding food & energy slipped 0.1% lowering the y/y rise to 1.6%. That was the weakest monthly gain since July. The price index for energy goods & services declined 3.4% (+13.2% y/y) while the food price index rose 0.4% (-0.7% y/y).
Personal spending held steady (4.7% y/y) following little change in February, revised from 0.1%. A 0.2% gain had been expected. When adjusted for lower prices, personal spending increased 0.3% (2.8% y/y) following two months of decline. Real spending on durable goods declined 0.7% (+6.8% y/y) after a 0.1% rise. Spending on motor vehicles & parts fell 3.8% (+4.8% y/y), the third straight monthly decline. Purchases of home furnishings & appliances gained 0.6% (5.7% y/y) after two months of little change. Buying of recreational goods & vehicles strengthened 1.1% (13.7% y/y) after a 2.5% jump. Nondurable goods purchases improved 0.3% (2.4% y/y) after two months of slight decline. Gasoline & other energy goods purchases weakened 2.1% (-4.4% y/y) and reversed February's rise. Clothing & footwear purchases rose 1.8% (0.2% y/y). Real spending on services increased 0.4% (2.3% y/y) after two months of decline. Recreation services spending jumped 1.3% (3.8% y/y) following a 0.6% drop, but health care spending notched just 0.1% higher (3.8% y/y) following two months of 0.2% rise.
The personal savings rate improved to 5.9% from 5.7%. It was the highest level since August. The level of personal saving declined, however, by 1.3% y/y.
The personal income & consumption figures are available in Haver's USECON database with detail in the USNA database. The Action Economics figure is in the AS1REPNA database. Further detail is in USNA.
| Personal Income & Outlays (%) | Mar | Feb | Jan | Mar Y/Y | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| Personal Income | 0.2 | 0.3 | 0.4 | 4.5 | 3.6 | 4.4 | 5.2 |
| Wages & Salaries | 0.1 | 0.5 | 0.4 | 5.5 | 4.3 | 5.1 | 5.1 |
| Disposable Personal Income | 0.2 | 0.3 | 0.3 | 4.3 | 3.9 | 3.8 | 5.1 |
| Personal Consumption Expenditures | 0.0 | -0.0 | 0.2 | 4.7 | 3.9 | 3.5 | 4.4 |
| Personal Saving Rate | 5.9 | 5.7 | 5.4 | 5.8 (March '16) |
5.8 | 5.8 | 5.6 |
| PCE Chain Price Index | -0.2 | 0.1 | 0.4 | 1.8 | 1.1 | 0.3 | 1.5 |
| Less Food & Energy | -0.1 | 0.2 | 0.3 | 1.6 | 1.7 | 1.4 | 1.6 |
| Real Disposable Income | 0.5 | 0.2 | -0.1 | 2.4 | 2.8 | 3.5 | 3.5 |
| Real Personal Consumption Expenditures | 0.3 | -0.1 | -0.3 | 2.8 | 2.7 | 3.2 | 2.9 |
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.
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