Global| Feb 28 2020U.S. Personal Spending Decelerates Despite Strong Income Gain
by:Tom Moeller
|in:Economy in Brief
Summary
Personal consumption expenditures rose 0.2% (4.5% y/y) during January following a 0.4% December gain, revised from 0.3%. A 0.3% January gain had been expected in the Action Economics Forecast Survey. In constant dollars, spending [...]
Personal consumption expenditures rose 0.2% (4.5% y/y) during January following a 0.4% December gain, revised from 0.3%. A 0.3% January gain had been expected in the Action Economics Forecast Survey. In constant dollars, spending edged 0.1% higher (2.7% y/y) for a second consecutive month. Real durable goods spending increased 0.5% (7.3% y/y) during January after a 0.1% rise. Spending on motor vehicles rebounded 1.5% (9.3% y/y) after a 0.2% dip. Recreational goods & vehicles outlays rose 0.9% (10.3% y/y) following an easing of 0.3%. Spending on furniture & household equipment slipped 0.1% (+3.3% y/y) for a second straight month. Real nondurable goods buying weakened 0.2% last month (+2.1% y/y) after a 0.1% improvement. Apparel spending dropped 2.2% (+2.1% y/y) after a 0.7% rise. Real gasoline outlays held roughly steady (-2.2% y/y) following two months of decline. Real spending on services improved 0.1% (2.3% y/y) for a second straight month. The rise was held back by a 0.3% fall (+0.7% y/y) in spending on housing & utilities, off for the third month in the last four. Health care spending held steady (2.9% y/y) after rising 0.3% while spending at restaurants & hotels increased 0.5% (3.7% y/y) after a 1.1% jump.
Personal income strengthened 0.6% (4.0% y/y) after a 0.1% December gain, revised from 0.2%. A 0.3% rise was expected. Wages & salaries improved 0.5% (3.7% y/y) after edging 0.1% higher. Proprietors income rose 0.6% (4.5% y/y) following a 1.4% decline. Rental incomes rose 0.5% (4.4% y/y) after two straight 0.6% increases, and receipts on assets gained 0.4% (2.9% y/y) due to a 1.1% rise (4.1% y/y) in personal dividend income. Transfer receipts strengthened 1.6% (5.6% y/y) after holding steady in December.
Disposable personal income rose 0.6% (4.0% y/y) last month after edging 0.1% higher, revised from 0.2%. Adjusted for price inflation, take-home pay strengthened 0.5% (2.2% y/y) after slipping 0.1% in December.
Last month's strength in income relative to the gain in spending caused the personal savings rate to rise to 7.9% in January and recouped the prior month's decline. The level of personal saving declined 0.2% y/y last month.
The PCE chain price index increased 0.1% (1.7% y/y) after a 0.3% strengthening. The price index excluding food & energy also inched up 0.1% (1.6% y/y) after a 0.2% rise. Energy prices fell 0.7% (+5.6% y/y) after a 1.7% gain. Food prices rose 0.3% (0.8% y/y) after dipping 0.1%.
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 AS1REP NA 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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