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Economy in Brief
Kansas City Fed Manufacturing Index Dips in May But Remains Strong
The Kansas City Fed reported that its manufacturing sector business activity index declined to 23 in May...
U.S. Pending Home Sales Decline Sharply in April
Home buying remains under pressure...
U.S. Unemployment Claims Eased Slightly in the Latest Week
Initial claims for unemployment insurance filed in the week ended May 21 were 210,000 (-52.4% y/y)...
Italian Confidence Makes Small Bounce in May; Is It a Signal or Is It Noise?
Italian business and consumer confidence indexes both are substantially lower in May...
U.S. Durable Goods Orders Increase Modestly in April
Manufacturers' new orders for durable goods increased 0.4% during April (12.2% y/y)...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
State Coincident Indexes in April 2022
State Labor Markets in April 2022
Profits & Margins Plunge In Q1: Expect More Margin Contraction As Fed Squeezes Inflation
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation and Fed Policy: A Relationship which Should Worry the Fed and Scare Investors
by Tom Moeller March 30, 2015
Personal income rose 0.4% during February (4.5% y/y) following a revised 0.4% January increase, last month reported as 0.3%. Expectations had been for a 0.3% rise in the Consensus Economics Forecast Survey. Wages & salaries improved 0.3% (4.5% y/y) following a 0.6% jump. Transfer payments firmed 0.6% (5.9% y/y) as Medicaid payments surged 1.5% (11.7% y/y), roughly the same as in January. These gains were offset by a 0.5% decline (+3.0% y/y) in proprietors income, off sharply for the third month in the last four, but rental income increased 0.6% (6.9% y/y). Dividend income jumped 2.8% (11.0% y/y) with improved corporate profitability but interest income continued 0.5% lower (-1.2% y/y). Disposable income gained 0.4% (4.3% y/y) after a 0.5% jump, revised from 0.4%.
Personal consumption expenditures nudged 0.1% higher (+3.3% y/y) following two consecutive monthly declines. The increase disappointed expectations for a 0.2% rise. The PCE chain price index improved 0.2% (0.3% y/y), the first rise in four months.
Real disposable income increased 0.2% (4.0% y/y) after a 0.9% rise. Real personal spending slipped 0.1% (+3.0% y/y) after a 0.2% gain.
In constant dollars, motor vehicles and parts purchases fell 2.8% last month (+8.6% y/y) following a 1.1% jump. Furnishings & appliance spending slipped 0.1% (+8.0% y/y) after a 0.5% rise. Recreational goods & vehicles purchases also edged 0.1% lower but remained up 9.3% y/y. Apparel purchases slipped 0.1% as well (+3.8% y/y), the third consecutive monthly shortfall. Real services purchases ticked 0.1% higher (2.6% y/y) after two months of 0.2% rise. Spending on restaurants and hotels retrenched by 0.5% (+4.3% y/y) for the second straight month.
The strength in income accompanied by the weakness in spending continued to lift the personal savings rate, last month to 5.8%, the highest level since December 2012. Personal saving rose 20.4% during the last twelve months.
The 0.2% rise (0.3% y/y) in the chain price index was the first gain in the last five months. Energy prices rose 1.0% (-19.9% y/y), the first increase since June as gasoline prices gained 2.2% (-32.0% y/y). Food prices improved 0.1% (2.6% y/y). Durable goods prices rose 0.1% (-2.6% y/y) while nondurable goods prices rose 0.4% (-3.4% y/y). Services prices ticked 0.1% higher (2.1% y/y) after a 0.2% rise. The price index excluding food & energy edged up 0.1% (1.4% y/y), about the same as during the last eight months.
The personal income & consumption figures are available in Haver's USECON database with detail in the USNA database. The consensus expectation figures are in the AS1REPNA database.
Personal Income & Outlays (%) | Feb | Jan | Dec | Y/Y | 2014 | 2013 | 2012 |
---|---|---|---|---|---|---|---|
Personal Income | 0.4 | 0.4 | 0.3 | 4.5 | 4.0 | 2.0 | 5.2 |
Wages & Salaries | 0.3 | 0.6 | 0.1 | 4.5 | 4.5 | 2.8 | 4.5 |
Disposable Personal Income | 0.4 | 0.5 | 0.3 | 4.3 | 3.8 | 1.0 | 4.9 |
Personal Consumption Expenditures | 0.1 | -0.2 | -0.2 | 3.3 | 3.9 | 3.6 | 3.7 |
Personal Saving Rate | 5.8 | 5.5 | 4.9 | 5.0 (Feb '14) |
4.9 | 4.9 | 7.2 |
PCE Chain Price Index | 0.2 | -0.4 | -0.2 | 0.3 | 1.3 | 1.2 | 1.8 |
Less Food & Energy | 0.1 | 0.1 | 0.0 | 1.4 | 1.4 | 1.3 | 1.8 |
Real Disposable Income | 0.2 | 0.9 | 0.5 | 4.0 | 2.5 | -0.2 | 3.0 |
Real Personal Consumption Expenditures | -0.1 | 0.2 | 0.1 | 3.0 | 2.5 | 2.4 | 1.8 |