U.S. Personal Income Stagnates and Spending Slows

Personal income was unchanged during June (2.6% y/y) following a 0.3% May rise, revised from 0.4%. A 0.4% increase had been expected in the Action Economics Forecast Survey. Figures back to 2014 were revised and last year's increase in income was lowered to 2.4% from 3.4%. The 5.0% increase in 2015 was increased from 4.4%. A 3.0% decline (+0.9% y/y) in dividend income was behind much of last month's weakness as it followed a 4.8% jump. Interest income also fell 0.9% (+2.8% y/y for a third consecutive month. Wages & salaries improved 0.4% (2.5% y/y) following a 0.1% uptick. Proprietors income eased 0.1% (+2.2% y/y) after a 0.1% rise. A 0.6% rise (5.5% y/y) in rental income followed a 0.4% increase. Transfer payments gained 0.2% (3.1% y/y) following two months of little change. Social Security payments increased 0.4% (3.7% y/y) following no change. Medicare income improved 0.2% (2.7% y/y) as it has on a monthly basis since January of last year.

Disposable income was unchanged (2.6% y/y) following a 0.4% rise. Adjusted for price changes, take-home pay eased 0.1% (+1.2% y/y) after a 0.5% jump.    

Personal consumption expenditures improved 0.1% (3.8% y/y) following a 0.2% rise. A 0.1% uptick had been expected. Earlier figures were little revised. Adjusted for price change, personal spending held steady (2.4% y/y) after a 0.2% rise. Real durable goods purchases eased 0.1% (+5.3% y/y) after a 0.2% rise. Real nondurable goods spending fell 0.2% (+1.5% y/y) following a 0.4% gain. Real spending on services rose 0.1% (2.2% for a second month.

The personal savings rate eased to 3.8% and the downward revisions to income resulted in the May rate being lowered to 3.9% from 5.5%, along with downward revisions to earlier periods.

The chain-type price index held steady (1.4% y/y) for the second straight month. Excluding food & energy, prices increased 0.1% (1.5% y/y) also for a second consecutive month. Durable goods prices fell 0.2% (-2.0% y/y), down for the fifth straight month. Nondurable goods prices fell 0.2% (+0.5% y/y), after a 0.8% decline. Services prices rose 0.1% (2.3% y/y), following a 0.2% rise.

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.

Personal Income & Outlays (%)	Jun	May	Apr	Jun Y/Y	2016	2015	2014
Personal Income	-0.0	0.3	0.2	2.6	2.4	5.0	5.3
Wages & Salaries	0.4	0.1	0.6	2.5	2.9	5.1	5.1
Disposable Personal Income	-0.0	0.4	0.2	2.6	2.6	4.5	5.1
Personal Consumption Expenditures	0.1	0.2	0.3	3.8	4.0	3.9	4.4
Personal Saving Rate	3.8	3.9	3.7	5.1 (Jun '16)	4.9	6.1	5.7
PCE Chain Price Index	0.0	-0.0	0.2	1.4	1.2	0.3	1.5
Less Food & Energy	0.1	0.1	0.2	1.5	1.8	1.3	1.6
Real Disposable Income	-0.1	0.5	0.0	1.2	1.4	4.2	3.6
Real Personal Consumption Expenditures	0.0	0.2	0.1	2.4	2.7	3.6	2.9

 

 

ISM Factory Sector Index Backpedals
by Tom Moeller  August 1, 2017

The ISM factory sector composite index fell to 56.3 during July from June's unrevised reading of 57.8. The index has been close to this level all year, but remained well above the 2015 low of 47.9. A level of 56.4 had been expected in the Action Economics Forecast Survey.

Declines in the component series were numerous. The new orders series fell m/m to 60.4, down from the February high of 65.1. The production index also eased to 60.6, but remained up from 54.0 averaged last year. The supplier deliveries index declined to 55.4, indicating, a quicker pace of product delivery speeds. Nevertheless, speeds have been slowing since early last year. Working the other way, the inventories series rose to 50.0, up sharply from late-2015.

The employment figure declined m/m to 55.2, also up from a low of 46.2 early in 2016. Payrolls have been expanding for ten straight months. During the last ten years, there has been an 87% correlation between the index and the m/m change in factory sector employment. Twenty-four percent (NSA) of respondents reported higher employment while 10% indicated a decline.

The prices paid index jumped to 62.0, its highest level in three months, but remained below the March 2017 high of 70.5. Thirty-three percent (NSA) of respondents reported paying higher prices while nine percent paid less.

The export order index eased to 57.5, down slightly from the March high of 59.5, but up sharply from 48.6 during all of 2015. The import order index rose to a three-year high of 56.0. The order backlog series eased to 55.0, but also remained up sharply from the 2015 low.

The ISM figures are diffusion indexes where a reading above 50 indicates increase. The figures from the Institute for Supply Management can be found in Haver's USECON database. The expectations number can be found in Haver's AS1REPNA database.

ISM Mfg (SA)	Jul	Jun	May	Jul'16	2016	2015	2014
Composite Index	56.3	57.8	54.9	52.3	51.5	51.4	55.6
New Orders	60.4	63.5	59.5	56.1	54.7	52.6	58.9
Production	60.6	62.4	57.1	54.8	54.0	53.5	59.2
Employment	55.2	57.2	53.5	49.3	49.7	51.0	54.4
Supplier Deliveries	55.4	57.0	53.1	51.8	51.9	50.7	55.0
Inventories	50.0	49.0	51.5	49.5	47.2	49.0	50.8
Prices Paid Index (NSA)	62.0	55.0	60.5	55.0	53.5	39.8	55.6

 

U.S. Petroleum Prices Continue Higher
by Tom Moeller  August 1, 2017

Regular gasoline prices rose to $2.35 per gallon last week (8.9% y/y) from $2.31 in the prior week. They remained down, however, from the high of $2.45 per gallon in late-April. Haver Analytics constructs factors adjusting for the seasonal variation in gasoline pump prices. The seasonally adjusted gasoline price increased to $2.19 per gallon, but remained lower than the high of $2.71 in early-January.

WTI crude oil prices rose to $48.30 per barrel last week (15.3% y/y), but remained down from $53.18 in early-April. Prices were $50.17 yesterday. Brent crude oil prices increased to $50.75 per barrel last week, then rose to $52.64 per barrel yesterday.

Natural gas prices eased to $2.94/mmbtu last week (+4.6% y/y) and were $2.84 yesterday.

Last week, gasoline demand fell 0.3% y/y, while total petroleum product demand improved 4.6% y/y. Gasoline inventories fell 4.7% y/y, while inventories of all petroleum products declined 2.8% y/y. Crude oil input to refineries increased 3.2% y/y in the last four weeks.

The energy price data are reported by the U.S. Department of Energy. The petroleum demand and inventory figures are from the Oil & Gas Journal Weekly. These data can be found in Haver's WEEKLY database. The daily figures are in DAILY and greater detail on prices, demand and production, along with regional breakdowns, are in OILWKLY.

Weekly Energy Prices	07/31/17	07/24/17	07/17/17	Y/Y %	2016	2015	2014
Retail Gasoline ($ per Gallon, Regular)	2.35	2.31	2.28	8.9	2.31	2.03	2.30
Light Sweet Crude Oil, WTI ($ per bbl.)	48.30	46.42	45.51	15.3	43.22	48.90	93.64
Natural Gas ($/mmbtu, LA, WSJ)	2.94	3.07	2.95	4.6	2.49	2.62	4.37

 

U.S. Light Vehicle Sales Improve Slightly
by Tom Moeller  August 2, 2017

Total sales of light vehicles rose 0.5% during July (-5.9% y/y) to 16.77 million units (SAAR) from 16.64 million in June, according to the Autodata Corporation. Earlier data were revised.

Passenger car sales increased 3.9% (-12.5% y/y) to 6.21 million units. Domestically-made passenger car sales rose 5.1% (-12.1% y/y) to 4.55 million units. Sales of imported passenger cars improved 0.9% (-13.4% y/y) to 1.67 million units.

Light truck sales declined 1.6% (-1.6% y/y) to 10.55 million. Sales of domestically-made light trucks fell 2.5% (-4.0% y/y) to 8.68 million units. Imported light truck sales increased 3.1% (11.0% y/y) to 1.88 million units. Trucks' share of the U.S. vehicle market slipped m/m to 62.9%, but remained up from 60.1% twelve months earlier.

Imports share of the U.S. vehicle market improved m/m to 21.1%. Imports share of the passenger car market fell to 26.8%. Imports share of the light truck market increased to 17.7%, higher than the 12.7% share during all of 2014.

U.S. vehicle sales figures are published by the Autodata Corporation and can be found in Haver's USECON database.

The Low Level of Global Real Interest Rates from Federal Reserve Vice Chairman Stanley Fischer is available here https://www.federalreserve.gov/newsevents/speech/fischer20170731a.htm

U.S. vehicle sales figures are published by the Autodata Corporation and can be found in Haver's USECON database.

Light Weight Vehicle Sales (SAAR, Million Units)	Jul	Jun	May	Jul Y/Y %	2016	2015	2014
Total	16.77	16.70	16.79	-5.9	17.55	17.42	16.52
Autos	6.21	5.98	6.24	-12.5	7.10	7.73	7.92
Domestic	4.55	4.33	4.51	-12.1	5.20	5.63	5.68
Imported	1.67	1.65	1.73	-13.4	1.90	2.10	2.24
Light Trucks	10.55	10.72	10.55	-1.6	10.44	9.74	8.60
Domestic	8.68	8.90	8.65	-4.0	8.75	8.37	7.51
Imported	1.88	1.82	1.91	11.0	1.69	1.38	1.09