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Economy in Brief

U.S. Personal Income Stagnates and Spending Slows
by Tom Moeller  August 1, 2017

Personal income was unchanged during June (2.6% y/y) following a 0.3% May rise, revised from 0.4%. A 0.4% increase had been expected in the Action Economics Forecast Survey. Figures back to 2014 were revised and last year's increase in income was lowered to 2.4% from 3.4%. The 5.0% increase in 2015 was increased from 4.4%. A 3.0% decline (+0.9% y/y) in dividend income was behind much of last month's weakness as it followed a 4.8% jump. Interest income also fell 0.9% (+2.8% y/y for a third consecutive month. Wages & salaries improved 0.4% (2.5% y/y) following a 0.1% uptick. Proprietors income eased 0.1% (+2.2% y/y) after a 0.1% rise. A 0.6% rise (5.5% y/y) in rental income followed a 0.4% increase. Transfer payments gained 0.2% (3.1% y/y) following two months of little change. Social Security payments increased 0.4% (3.7% y/y) following no change. Medicare income improved 0.2% (2.7% y/y) as it has on a monthly basis since January of last year.

Disposable income was unchanged (2.6% y/y) following a 0.4% rise. Adjusted for price changes, take-home pay eased 0.1% (+1.2% y/y) after a 0.5% jump.

Personal consumption expenditures improved 0.1% (3.8% y/y) following a 0.2% rise. A 0.1% uptick had been expected. Earlier figures were little revised. Adjusted for price change, personal spending held steady (2.4% y/y) after a 0.2% rise. Real durable goods purchases eased 0.1% (+5.3% y/y) after a 0.2% rise. Real nondurable goods spending fell 0.2% (+1.5% y/y) following a 0.4% gain. Real spending on services rose 0.1% (2.2% for a second month.

The personal savings rate eased to 3.8% and the downward revisions to income resulted in the May rate being lowered to 3.9% from 5.5%, along with downward revisions to earlier periods.

The chain-type price index held steady (1.4% y/y) for the second straight month. Excluding food & energy, prices increased 0.1% (1.5% y/y) also for a second consecutive month. Durable goods prices fell 0.2% (-2.0% y/y), down for the fifth straight month. Nondurable goods prices fell 0.2% (+0.5% y/y), after a 0.8% decline. Services prices rose 0.1% (2.3% y/y), following a 0.2% rise.

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.

Personal Income & Outlays (%) Jun May Apr Jun Y/Y 2016 2015 2014
Personal Income -0.0 0.3 0.2 2.6 2.4 5.0 5.3
  Wages & Salaries 0.4 0.1 0.6 2.5 2.9 5.1 5.1
Disposable Personal Income -0.0 0.4 0.2 2.6 2.6 4.5 5.1
Personal Consumption Expenditures 0.1 0.2 0.3 3.8 4.0 3.9 4.4
Personal Saving Rate 3.8 3.9 3.7 5.1
(Jun '16)
4.9 6.1 5.7
PCE Chain Price Index 0.0 -0.0 0.2 1.4 1.2 0.3 1.5
  Less Food & Energy 0.1 0.1 0.2 1.5 1.8 1.3 1.6
Real Disposable Income -0.1 0.5 0.0 1.2 1.4 4.2 3.6
Real Personal Consumption Expenditures 0.0 0.2 0.1 2.4 2.7 3.6 2.9
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