Global| Mar 27 2020U.S. Personal Income Stays Strong While Spending Moderates, Pre-Coronavirus
by:Tom Moeller
|in:Economy in Brief
Summary
Personal consumption expenditures rose 0.2% (4.9% y/y) in February, the same as in January. A 0.3% gain had been expected. In constant dollars, total spending edged 0.1% higher (3.0% y/y) for a third consecutive month. Real durable [...]
Personal income increased 0.6% (4.0% y/y) in February as it did in January. A 0.4% rise had been expected in the Action Economics Forecast Survey. Wages & salaries improved 0.5% (3.3% y/y) for a second month, reflecting strength in the employment situation before the coronavirus outbreak. Proprietors income surged 2.8% (7.8% y/y) following a 0.9% rise. Rental incomes rose a steady 0.4% (4.2% y/y) while receipts on assets eased 0.2% (+2.5% y/y) due to a 0.5% decline (+1.6% y/y) in personal interest income. Dividend income rose 0.2% (3.6% y/y). Transfer receipts improved 0.3% (5.4% y/y) after strengthening 1.6% in January.
Personal consumption expenditures rose 0.2% (4.9% y/y) in February, the same as in January. A 0.3% gain had been expected. In constant dollars, total spending edged 0.1% higher (3.0% y/y) for a third consecutive month. Real durable goods spending declined 0.7% (+7.8% y/y) during February after a 0.5% rise. Spending on motor vehicles declined 1.0% (+8.4% y/y) after edging lower for two months. Recreational goods & vehicles outlays fell 0.8% (+10.8% y/y) following a 2.1% rise. Spending on furniture & household equipment eased 0.7% (+5.4% y/y) after a 1.0% gain. Real nondurable goods buying improved 0.1% last month (3.1% y/y), the same as in January. Apparel spending dropped 1.0% (+3.5% y/y) after falling 1.5%. Real gasoline outlays rose a steady 0.7% (-1.2% y/y). Food & beverage purchases eased 0.3% (+2.9% y/y), off for the third straight month. Real spending on services improved 0.2% (2.3% y/y) after holding steady in January. The rise was bolstered by a 0.7% surge (1.1% y/y) in spending on housing & utilities after declining in three of the prior four months. Health care spending rose 0.2% (2.9% y/y) after no change while spending at restaurants & hotels weakened 0.9% (+2.0% y/y) after a 0.1% rise.
Disposable personal income rose 0.5% (4.0% y/y) last month after an unrevised 0.6% gain. Adjusted for price inflation, take-home pay increased 0.4% (2.2% y/y) after rising 0.5% in January.
Last month's strength in income relative to spending caused the personal savings rate to rise to 8.2%, the highest level since March of last year. The level of personal saving declined 3.2% y/y last month.
The PCE chain price index increased 0.1% in February (1.8% y/y) for the second consecutive month. The price index excluding food & energy rose a steady 0.2% (1.8% y/y). Motor vehicle prices edged 0.1% higher (-0.3% y/y) and home furnishings & appliance prices rose 0.7% (-0.7% y/y). Apparel costs strengthened 0.6% (-1.7% y/y) for a second straight month. Gasoline & oil prices fell 3.4% (+5.6% y/y). Services costs improved a steady 0.2% (2.5% y/y). Housing & utilities prices rose 0.2% (3.0% y/y) but health care prices eased 0.1% (+1.9% y/y). Energy prices were off 2.1% (+2.8% y/y) after a 0.7% decline. Food prices rose 0.4% (0.8% y/y) after increasing 0.3%.
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 AS1REP NA 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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