Global| Oct 31 2019U.S. Personal Spending and Earnings Increase
by:Tom Moeller
|in:Economy in Brief
Summary
Consumers remain in a mood to spend. Personal consumption expenditures improved 0.2% (3.9% y/y) during September, the same as in August which was revised from 0.1%. A 0.3% gain had been expected in the Action Economics Forecast [...]
Consumers remain in a mood to spend. Personal consumption expenditures improved 0.2% (3.9% y/y) during September, the same as in August which was revised from 0.1%. A 0.3% gain had been expected in the Action Economics Forecast Survey. In constant dollars, spending also rose 0.2% (2.6% y/y) for the second straight month. Constant dollar spending on durable goods increased 0.6% (5.7% y/y) for a second month as well. The gain was led by a 1.4% rebound (2.5% y/y) in motor vehicle outlays after two months of decline. Outlays on recreational vehicles eased 0.1% (+11.8% y/y) after rising 0.8% and constant dollar demand for home furnishings & appliances fell 0.4% (+2.9% y/y). Real nondurable goods outlays rose 0.3% (4.0% y/y) after a 0.2% gain. Clothing & footwear demand in constant dollars rose 0.8% (3.2% y/y) and recouped the August shortfall. Real food & beverage purchases eased 0.1% (+ 2.9% y/y) but gasoline demand rose 0.8% (2.1% y/y). Real services outlays edged 0.1% higher for the fourth consecutive month. The 1.7% y/y rise compares to 3.2% y/y as of August of last year. The overall change was held back by spending at restaurants & hotels which declined 0.4% (+1.3% y/y) in constant dollars after easing 0.1%. Real expenditures on transportation services fell 0.2% (+3.1% y/y). To the upside, real housing & utilities demand, the largest services category, edged 0.1% higher (0.8% y/y). Real recreation services outlays strengthened 0.4% (1.9% y/y) after holding steady in August. Real health care services outlays rose 0.2% (2.6% y/y).
Personal income improved 0.3% (4.9% y/y) in September following a 0.5% rise. Wages & salaries held steady (5.2% y/y) after a 0.6% strengthening in August. Proprietors income rose 0.4% (7.1% y/y) after surging 2.3%. Rental incomes were unchanged (1.4% y/y) for the third straight month, but receipts on assets strengthened 0.9% (1.8% y/y) following two months of decline. Transfer receipts improved 0.3% (7.3% y/y), the same as during the prior two months. Personal disposable income rose 0.3% in September (4.9% y/y) after surging 0.6% in August. Adjusted for inflation, take-home pay also improved 0.3% (3.5% y/y) after rising 0.5%.
Last month's strength in disposable income relative to the gain in spending lifted the personal savings rate to 8.3%, its highest level in six months. The level of personal saving rose 16.6% y/y in September.
Price inflation as measured by the PCE chain price index was steady (1.3% y/y) for the second consecutive month. The price index excluding food & energy also was unchanged and the y/y increase eased to 1.7%. Energy prices declined 1.3% (-4.8% y/y), down for a second consecutive month. Food prices held steady (0.8% y/y) following three straight months of decline.
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
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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