Global| Jun 29 2012U.S. Personal Income Increases While Spending Declines
by:Tom Moeller
|in:Economy in Brief
Summary
Personal income gained an expected 0.2% (2.9% y/y) last month following an unrevised 0.2% April rise. Weaker employment growth, however, took its toll on income as wages and salaries were unchanged (3.2% y/y) after a downwardly [...]
Personal income gained an expected 0.2% (2.9% y/y) last month
following an unrevised 0.2% April rise. Weaker employment growth, however,
took its toll on income as wages and salaries were unchanged (3.2% y/y)
after a downwardly revised 0.1% April uptick. A 0.8% rise (-0.4% y/y) in
interest earnings and a 0.6% gain (6.3% y/y) in dividend income
provided most of the overall income rise. Disposable income increased 0.2%
but after adjustment for lower prices, take-home pay increased an improved
0.3% (1.1% y/y).
Personal consumption expenditures slipped marginally in May, also as expected, following a downwardly revised 0.1% April uptick. Adjusted for prices, spending rose just 0.1% in May and April. Much of last month's weakness in total real spending was due to a 2.5% decline (+7.6% y/y) in outlays on motor vehicles. Real spending on furniture & appliances rose 0.5% (6.2% y/y) and outlays on apparel increased 0.2% (-0.5% y/y). With easier prices, gasoline purchases increased 1.5% (1.1% y/y).
The PCE chain price index fell 0.2% (+1.5% y/y) in May, led lower by a 6.6% drop (-4.1% y/y) in gasoline costs. Durable goods prices rose just 0.1% (-1.2% y/y) but apparel costs gained 0.5% (5.4% y/y). Services prices inched up 0.1% (2.0% y/y).
The personal saving rate improved to 3.9% as spending moderated. That was the highest level since January but down from last May's 4.7%.
The personal income & consumption figures are available in Haver's USECON and USNA databases. The consensus expectations figures are in the AS1REPNA database.
| Personal Income & Outlays(%) | May | April | Mar | Y/Y | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| Personal Income | 0.2 | 0.2 | 0.4 | 2.9 | 5.0 | 3.7 | -4.3 |
| Wages & Salaries | 0.0 | 0.1 | 0.2 | 3.2 | 4.1 | 2.2 | -4.3 |
| Disposable Personal Income | 0.2 | 0.2 | 0.4 | 2.6 | 3.7 | 3.6 | -2.1 |
| Personal Consumption Expenditures | -0.0 | 0.1 | 0.1 | 3.5 | 4.7 | 3.8 | -1.7 |
| Personal Saving Rate | 3.9 | 3.7 | 3.7 | 4.7 (May'11) |
4.6 | 5.3 | 5.1 |
| PCE Chain Price Index | -0.2 | 0.0 | 0.2 | 1.5 | 2.5 | 1.8 | 0.2 |
| Less Food & Energy | 0.1 | 0.1 | 0.2 | 1.8 | 1.4 | 1.4 | 1.6 |
| Real Disposable Income | 0.3 | 0.1 | 0.2 | 0.6 | 1.1 | 1.8 | -2.3 |
| Real Personal Consumption Expenditures |
0.1 | 0.1 | -0.2 | 1.9 | 2.2 | 2.0 | -1.9 |
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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