Recent Updates

  • New Zealand: Accommodation Survey (Oct), Truckometer (Nov); Australia: Rural Production (2016)
  • Japan: Supply and Demand of Crude Oil (Oct), Corporate Goods Price Index (Nov)
  • Philippines: Construction WPI (Nov); Korea: Motor Vehicle Registrations (Nov); Bangladesh: Money Supply (Oct); Hong Kong: Direct Investment (2016)
  • Germany: Balance of Payments (Oct), Reserve Template (Nov)
  • more updates...

Economy in Brief

U.S. Take-Home Pay & Personal Spending Decline When Adjusted for Inflation
by Tom Moeller  March 1, 2017

Disposable personal income, after adjustment for higher prices, fell 0.2% during January following two months of 0.1% increase. It was the first decline since March 2015. The y/y increase fell to 2.0%, and compared to 4.4% y/y growth in January 2015. Nominal disposable income increased 0.3% last month, the same as during December.

Real personal consumption expenditures declined 0.3% and reversed December's increase. Nominal spending improved 0.3%, the same as in December, as expected by the Action Economics Forecast Survey.

Constant dollar spending by category included a 0.8% decline (+8.8% y/y) in durable goods purchases which followed a 1.8% jump. Motor vehicle purchases fell 2.3% (+9.6% y/y) and reversed half of the prior month's jump. Real furniture & durable household equipment buying fell 0.9% (+5.0% y/y) and recreational goods & vehicles purchases remained unchanged (+11.7% y/y) following four consecutive months of strong increase. Real nondurable goods purchases were little changed (+2.1% y/y). A 0.5% increase (4.7% y/y) in real foods & beverage spending was offset by a 0.6% decline (+0.1% y/y) in apparel purchases. Real spending on gasoline & energy goods was off 2.3% (-4.6% y/y). Constant dollar spending on services eased 0.2% (+2.0% y/y) as spending on housing & utilities fell 1.1% (+0.9% y/y). Real spending on food services & accommodations offset the decline with a 1.0% rise (2.4% y/y).

A 0.4% increase (4.0% y/y) in personal income was the strongest gain in three months. A 0.3% rise had been expected. Wages & salaries also improved 0.4% (4.5% y/y), the same as in December. Rental income increased 1.0% (7.3% y/y), about as it has for four months. Proprietors' income strengthened 0.8% (3.3% y/y) following little change. Receipts on assets remained unchanged (+2.6% y/y) for a second straight month. Personal transfer receipts increased 0.8% (3.7% y/y), the strongest increase in roughly two years. Social security payments jumped 1.0% (3.3% y/y) while Medicaid payments rose 0.2% (6.2% y/y).

The personal savings rate of 5.5% was down versus 6.2% twelve months earlier. The level of personal saving declined 6.8% y/y.

The chain price index strengthened 0.4%, the strongest rise since June 2009. The y/y rise of 1.9% compares to a 2.5% y/y increase in the CPI. Prices excluding food & energy improved 0.3%, the strongest rise since January 2007. The y/y rise of 1.7% compares to a 2.3% y/y gain in the core consumer price index.

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. Further detail is in USNA.

When Debts Compete, Which Wins? from the Federal Reserve Bank of New York is available here.

Personal Income & Outlays (%) Jan Dec Nov Jan Y/Y 2016 2015 2014
Personal Income 0.4 0.3 0.2 4.0 3.6 4.4 5.2
  Wages & Salaries 0.4 0.4 0.2 4.5 4.3 5.1 5.1
Disposable Personal Income 0.3 0.3 0.2 4.0 3.9 3.8 5.1
Personal Consumption Expenditures 0.2 0.5 0.2 4.7 3.8 3.5 4.4
Personal Saving Rate 5.5 5.4 5.7 6.2
(Jan '16)
5.9 5.8 5.6
PCE Chain Price Index 0.4 0.2 0.1 1.9 1.1 0.3 1.5
  Less Food & Energy 0.3 0.1 0.0 1.7 1.7 1.4 1.6
Real Disposable Income -0.2 0.1 0.1 2.0 2.8 3.5 3.5
Real Personal Consumption Expenditures -0.3 0.3 0.2 2.8 2.7 3.2 2.9
close
large image