Global| Jun 29 2016U.S. Personal Spending Growth Cools but Outpaces Income
by:Tom Moeller
|in:Economy in Brief
Summary
Personal consumption expenditures increased 0.4% (3.7% y/y) during May following a 1.1% April rise, revised from 1.0%. A 0.3% increase had been expected in the Action Economics Forecast Survey. So far this year, spending has risen at [...]
Personal consumption expenditures increased 0.4% (3.7% y/y) during May following a 1.1% April rise, revised from 1.0%. A 0.3% increase had been expected in the Action Economics Forecast Survey. So far this year, spending has risen at a 4.4% annual rate compared to a 3.4% rise during all of last year. Adjusted for price inflation, spending rose 0.3% (2.7% y/y) last month. Purchases of durable goods rose 0.6% (4.8% y/y) led by a 2.3% jump (12.5% y/y) in spending on recreational goods & vehicles. Motor vehicle spending rose 0.2% (-0.7% y/y) and furniture & appliance buying also gained 0.2% (5.1% y/y). Nondurable goods spending rose 0.5% (3.0% y/y) as food & beverage buying rose 1.1% (2.7% y/y). Gasoline purchases rose 0.6% (3.3% y/y) and apparel buying gained 0.2% (0.3% y/y). Services spending nudged 0.1% higher (2.3% y/y) led by a 1.0% jump (3.2% y/y) in transportation spending. Recreation services expenditures declined 1.2% (+0.8% y/y).
Personal income increased 0.2% (4.0% y/y) after a 0.5% rise, revised from 0.4%. A 0.3% increase had been expected. Wages & salaries grew 0.2% (4.6% y/y), the weakest rise in three months. Rental income increased 0.5% (6.6% y/y) and receipts on assets rose 0.4% (2.1% y/y). Transfer payments gained 0.2% (3.9% y/y) as Medicaid payments rose 0.5% (6.2% y/y). Social Security payments were little changed (2.6% y/y).
Disposable income increased 0.2% (4.1% y/y) following an unrevised 0.5% jump. In constant dollars, take home pay ticked 0.1% higher (3.2% y/y) after a 0.2% rise.
The personal savings rate eased to 5.3%, the lowest level this year and down from a 6.0% March high. Personal saving increased 13.4% y/y.
The chain type price index increased 0.2% (0.9% y/y) for a second straight month. Excluding food & energy, the price index rose 0.2% (1.6% y/y). The services price index increased a strengthened 0.3% (2.2% y/y). Nondurable goods prices inched 0.1% higher (-1.8% y/y) while durable goods prices declined 0.3% (-1.7% y/y).
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.
Health Spending Slowed Down in Spite of the Crisis from the Federal Reserve Bank of New York can be found here.
| Personal Income & Outlays (%) | May | Apr | Mar | May Y/Y | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| Personal Income | 0.2 | 0.5 | 0.3 | 4.0 | 4.5 | 4.4 | 1.1 |
| Wages & Salaries | 0.2 | 0.5 | 0.3 | 4.6 | 4.8 | 5.1 | 2.7 |
| Disposable Personal Income | 0.2 | 0.5 | 0.4 | 4.1 | 3.8 | 4.2 | -0.1 |
| Personal Consumption Expenditures | 0.4 | 1.1 | -0.0 | 3.7 | 3.4 | 4.2 | 3.1 |
| Personal Saving Rate | 5.3 | 5.4 | 6.0 | 4.8 (May '15) |
5.0 | 4.8 | 4.8 |
| PCE Chain Price Index | 0.2 | 0.3 | 0.1 | 0.9 | 0.3 | 1.4 | 1.4 |
| Less Food & Energy | 0.2 | 0.2 | 0.1 | 1.6 | 1.3 | 1.5 | 1.5 |
| Real Disposable Income | 0.1 | 0.2 | 0.3 | 3.2 | 3.4 | 2.7 | -1.4 |
| Real Personal Consumption Expenditures | 0.3 | 0.8 | -0.1 | 2.7 | 3.1 | 2.7 | 1.7 |
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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