U.S. Personal Income Increase Lags Gain in Spending

Personal income rose 0.2% (4.4% y/y) during September following a 0.4% August increase, revised from 0.3%. A 0.4% gain was expected in the Action Economics Forecast Survey. Leading last month's weaker rise was proprietors' income which fell 0.8% (+3.8% y/y) following two months of 0.3% increase. Diminished growth of 0.2% (4.6% y/y) in wages & salaries added to the slowdown as it followed a 0.5% gain. It was the weakest rise since October of last year. Income from assets notched 0.1% higher (5.3 y/y) for the second straight month. It reflected a dividend increase of 0.2% (3.4% y/y) and a 0.1% uptick (6.7% y/y) in interest income. Showing improvement was rental income which jumped 0.9% m/m (5.0% y/y), its largest monthly gain since January of last year.

Personal consumption expenditures rose 0.4% last month (5.5% y/y) after a 0.5% increase, revised from 0.3%. A 0.4% improvement had been expected. A 1.4% jump (4.7% y/y) in spending on durable goods led last month's rise as it followed a 0.6% gain. It was powered by a 2.3% increase (2.1% y/y) in purchases of motor vehicles and a 1.7% (7.0% y/y) strengthening in recreational goods & vehicles buying. Home furnishings & appliance spending gained a lessened 0.3% (5.7% y/y). Purchases of nondurable goods improved 0.3% (4.7% y/y). The dollar amount of spending on gasoline & other energy products was unchanged (9.5% y/y). Purchases of clothing rose 0.4% (4.7% y/y) after a 1.4% decline and spending on food & beverages increased 0.2% (3.8% y/y). Services outlays improved 0.3% (5.2% y/y), the weakest rise in seven months. Spending on housing & utilities rose 0.4% (4.8% y/y) as did health care outlays (4.6% y/y). Recreation services spending ticked just 0.1% higher (2.7% y/y) while spending at restaurants declined 1.4% (+5.5% y/y).

The personal savings rate eased to 6.2% from 6.4%. It has been falling steadily since the February high of 7.4%. The level of personal savings fell 0.2% y/y.

The personal consumption chain price index inched 0.1% higher (2.0% y/y) for the fourth straight month. The durable goods price index fell 0.4% (-1.6% y/y), down for the sixth month this year. Motor vehicle prices were off 0.8% (-0.3 y/y). The nondurable goods price index gained 0.1% (1.4% y/y). Clothing prices increased 1.1% (-0.3% y/y) following a 1.6% decline. Services prices rose 0.2% (2.7% y/y) for the fifth month in the last six. Health care costs improved 0.1% (1.9% y/y).

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.