Global| Jan 31 2020U.S. Personal Spending & Income Gains Slow
by:Tom Moeller
|in:Economy in Brief
Summary
Personal consumption expenditures improved 0.3% (5.0% y/y) during December following an unrevised 0.4% November rise. The increase matched expectations in the Action Economics Forecast Survey. During all of 2019, consumer spending [...]
Personal consumption expenditures improved 0.3% (5.0% y/y) during December following an unrevised 0.4% November rise. The increase matched expectations in the Action Economics Forecast Survey. During all of 2019, consumer spending rose 4.0%, the weakest increase since 2016. In constant dollars, spending edged 0.1% higher (3.3% y/y) last month. For the full year, real spending increased 2.6%, down from a 3.0% gain in 2018. Real durable goods spending declined 0.3% (+7.9% y/y) during December following a 1.2% increase. Spending on motor vehicles fell 2.2% (+1.6% y/y) and reversed most of November's increase. Recreational goods & vehicles outlays rose 0.4% (17.2% y/y) and spending on furniture improved 0.6% (8.0% y/y). Real nondurable goods buying increased 0.2% (4.6% y/y) after a 0.1% uptick. Apparel spending eased 0.1% (+5.5% y/y), off for the second straight month. Real spending on services improved 0.1% (2.3% y/y) following a 0.3% gain. The rise was held back by a 0.3% fall (+1.4% y/y) in spending on housing & utilities. Health care spending rose 0.2% (3.4% y/y) and spending at restaurants & hotels increased 0.5% (2.7% y/y).
Personal income improved 0.2% last month following a 0.4% November increase, revised from 0.5%. A 0.3% rise was expected. Wages & salaries improved 0.3% (5.2% y/y) after two months of 0.4% increase. Proprietors income weakened 1.5% (+1.9% y/y) and reversed November's increase. Rental incomes rose a steady 0.6% (4.0% y/y), and receipts on assets surged 1.0% (-1.4% y/y) due to a 1.6% rise (-0.0% y/y) in personal interest income. Transfer receipts were unchanged (7.0% y/y) following a 0.1% uptick.
Disposable personal income rose 0.2% last month (3.6% y/y) after a 0.4% November increase. Adjusted for price inflation, take-home pay eased 0.1% (+2.0% y/y) after November's 0.3% rise.
Last month's strength in spending relative to the gain in income lessened the personal savings rate to 7.6%, its lowest level since July. The level of personal saving declined 10.4% y/y last month.
The PCE chain price index increased 0.3% (1.6% y/y), the strongest rise since April. The price index excluding food & energy rose 0.2% (1.6% y/y) after four straight months of 0.1% increase. Energy prices improved 1.5% (3.7% y/y) after a 0.8% gain. Food prices held steady (0.8% y/y) for the third month in the last four.
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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