Global| Dec 23 2010U.S. Personal Income & Spending Growth Remains Moderate
by:Tom Moeller
|in:Economy in Brief
Summary
Personal income growth remains on a moderate growth track supported by improved jobs growth. Last month, income grew 0.3% following a revised 0.4% October rise, initially reported as 0.5%. A 0.2% increase has been the Consensus [...]
Personal income growth remains on a moderate growth track supported by
improved jobs growth. Last month, income grew 0.3% following a revised 0.4%
October rise, initially reported as 0.5%. A 0.2% increase has been the Consensus
expectation. So far this year income has grown at a 3.6% annual rate after last
year's 1.7% decline. Quicker growth is largely attributable to improvement in
private sector wage income. Though it rose just 0.1% during November, that
followed a 0.6% October jump. So far this year wages have grown at a 4.1% annual
rate after last year's 5.8% decline. Still showing modest wage growth is the
government sector where the 0.1% gain last month followed 0.3% in October. This
year's 0.8% rise is down from 2.6% last year.
Disposable personal income rose 0.3%, the same as during October. It's up at a
3.1% rate this year following last year's slim 0.7% increase which was boosted
by the tax cut.
Proprietors' income reflected the improved economy with a 0.7% gain. It's up at a 6.1% rate this year after last year's 8.2% drop. Economic improvement also raised dividend income by 0.6% last month and at a 2.8% rate in 2010 following last year's 12.2% drop. Higher interest rates boosted interest income by 1.1% after a like gain in October. Nevertheless, interest income is off at a 2.9% rate so far this year.
Personal consumption expenditures rose 0.4% last month after a 0.7% October gain, initially reported as 0.4%. A 0.5% November increase had been expected. Spending on goods rose 0.5% (6.2% y/y) after a 1.7% October jump. Spending on apparel (6.7% y/y) and furniture (4.6% y/y) both improved but spending on motor vehicles and gasoline each fell during the month following strong gains earlier in the year. Spending on services rose a moderate 0.4% (2.7% y/y).
The personal savings rate slipped to 5.3% from a downwardly revised 5.3% in October. The savings rate remained down from the 5.9% level for all of last year though it remained up from the monthly low of 1.8% late in 2007.
Price inflation remained modest. The PCE chain price index rose 0.1% after October's 0.2% rise. The core PCE price deflator matched expectations and inched up 0.1% after four months of being unchanged. Motor vehicle prices slipped (1.9% y/y) while furniture prices (-4.6% y/y) fell. Twelve month growth of 1.3% in prices overall was the weakest since the early-1960s.
The personal income & consumption figures are available in Haver's USECON and USNA databases.
| Personal Income & Outlays (%) | Nov. | Oct. | Sept. | Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Personal Income | 0.3 | 0.4 | -0.0 | 3.8 | -1.7 | 4.0 | 5.7 |
| Wages & Salaries | 0.1 | 0.5 | 0.1 | 3.2 | -4.3 | 2.1 | 5.8 |
| Disposable Personal Income | 0.3 | 0.3 | -0.1 | 3.4 | 0.7 | 5.1 | 5.1 |
| Personal Consumption Expenditures | 0.4 | 0.7 | 0.3 | 3.8 | -1.0 | 3.0 | 5.2 |
| Saving Rate | 5.3 | 5.4 | 5.7 | 5.6 (Nov.'09) |
5.9 | 4.1 | 2.1 |
| PCE Chain Price Index | 0.1 | 0.2 | 0.1 | 1.0 | 0.2 | 3.3 | 2.7 |
| Less Food & Energy | 0.1 | 0.0 | -0.0 | 0.8 | 1.5 | 2.3 | 2.4 |
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.
More Economy in Brief
