Global| Sep 27 2013U.S. Personal Income Gain Leads Personal Consumption Higher
by:Tom Moeller
|in:Economy in Brief
Summary
The consumer earned more money last month, and spent it. Personal income in August matched expectations and increased 0.4% (3.7% y/y) following a 0.2% July rise, revised from 0.1%. An improved 0.4% increase (3.5% y/y) in wage & [...]
The consumer earned more money last month, and spent it. Personal income in August matched
expectations and increased 0.4% (3.7% y/y) following a 0.2% July rise,
revised from 0.1%. An improved 0.4% increase (3.5% y/y) in wage &
salaries followed a 0.3% July decline. The 1.3% gain (10.8% y/y) in rental
income and a 1.0% increase (10.8% y/y) in proprietors' earnings added to
the strength. Transfer receipts rose 0.4% (4.4% y/y). Offsetting these
gains was a 0.1% slip (+9.8% y/y) in dividend income and a 0.3% decline
(+1.9% y/y) in interest earnings. Disposable personal income increased 0.5%
(2.8% y/y) and inflation adjusted take-home pay rose 0.3% (1.6% y/y).
Personal consumption expenditures improved 0.3% (3.2% y/y) last month after a 0.2% rise in July, revised from 0.1%. The gain also matched expectations. Spending on durable goods jumped 0.5% (5.9% y/y) as motor vehicle purchases gained 1.1% (7.7% y/y). Home furnishings purchases rose 0.2% (4.4% y/y) with the strength in home buying; but spending on apparel fell 0.5% (+2.2% y/y). Gasoline purchases fell 1.1% (-3.2% y/y) and equaled the decline in real terms (-1.2% y/y). Spending on services gained 0.4% (3.0% y/y). Adjusted for price changes, personal consumption rose 0.2% (2.0% y/y).
The personal savings rate moved up to 4.6% but remained down slightly from 4.9% twelve months earlier. The total value of personal savings has fallen 3.7% during the last twelve months.
The PCE chain price index inched 0.1% higher (1.2% y/y) in August and matched the July rise. Durable goods prices again fell 0.3% (-1.9% y/y) while prices for nondurables rose 0.2% (0.4% y/y). Services prices increased 0.2% (1.9% y/y). Less food & energy, the chain price index rose 0.2% (1.2% y/y).
The personal income & consumption figures are available in Haver's USECON and USNA databases. The consensus expectation figure is in the AS1REPNA database.
Banking, Liquidity and Monetary Policy is from Fed Governor Jeremy C. Stein and it is available here.
| Personal Income & Outlays (%) | Aug | Jul | Jun | Y/Y | 2012 | 2011 | 2010 |
|---|---|---|---|---|---|---|---|
| Personal Income | 0.4 | 0.2 | 0.3 | 3.7 | 4.2 | 6.1 | 2.9 |
| Wages & Salaries | 0.4 | -0.3 | 0.4 | 3.5 | 4.3 | 4.1 | 2.0 |
| Disposable Personal Income | 0.5 | 0.3 | 0.3 | 2.8 | 3.9 | 4.8 | 2.8 |
| Personal Consumption Expenditures | 0.3 | 0.2 | 0.6 | 3.2 | 4.1 | 5.0 | 3.8 |
| Personal Saving Rate | 4.6 | 4.5 | 4.4 | 4.9 (Aug'12) |
5.6 | 5.7 | 5.6 |
| PCE Chain Price Index | 0.1 | 0.1 | 0.4 | 1.2 | 1.8 | 2.4 | 1.7 |
| Less Food & Energy | 0.2 | 0.1 | 0.2 | 1.2 | 1.7 | 1.4 | 1.3 |
| Real Disposable Income | 0.3 | 0.2 | -0.1 | 1.6 | 1.7 | 2.4 | 1.1 |
| Real Personal Consumption Expenditures | 0.2 | 0.1 | 0.2 | 2.0 | 2.2 | 2.5 | 2.0 |
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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