U.S. Personal Income Rose in November but Real Spending Was Flat

Personal income rose 0.4% (4.7% y/y) during November versus expectations for a 0.3% rise and following a 0.7% (4.8% y/y) in October. The gain reflected a 0.5% rise (6.2% y/y) in wages & salaries, corresponding to continued employment growth, and following a 0.5% rise in October. Proprietors' income eased 0.2% (3.7% y/y) following a similar retrenchment in October. Rental income eased 0.1% % (7.2% y/y) in November. Receipts on assets rose 0.5% (4.9% y/y) as interest income increased 0.6% (6.6% y/y) and dividend income rose 0.3 % (3.2% y/y). Personal transfer receipts increased 0.3% (1.1% y/y). Disposable income rose 0.4% (2.9% y/y) in November, following a rise of 0.7% (2.9% y/y) in October, while real disposable earnings rose 0.3% (-2.5% y/y) in November following an increase of 0.4% (-3.0% y/y) in October.

The personal saving rate edged up to 2.4% in November after the near record low of 2.2% in October, revised from 2.3%. The level of personal savings bounced back 10% last month from a decline of 5.2% in October and was 64.8% lower y/y.

Personal consumption expenditures (PCE) increased 0.1% (7.7% y/y) in November, after rising 0.9% (8.1% y/y) during October, initially reported as a 0.8% (7.9% y/y) rise. The Action Economics Forecast Survey had expected a 0.1% rise. In November, real PCE increased less than 0.1% (2.0% y/y), reflecting a decrease of 0.6% in spending on goods and an increase of 0.3% in spending on services. Real spending on durable goods declined 1.5% (+0.6% y/y) last month as spending on motor vehicle & parts decreased 4.3% (-1.5% y/y) after surging 5.2% in October. Real spending of furniture & appliances decreased 0.4% (-1.5% y/y) in November, after a 1.2% rise in October. Real spending on recreational goods & vehicles rose 0.5% (5.3% y/y) following a 0.4% increase in October.

Real spending on nondurable goods edged down 0.1% (-1.5% y/y) in November, after rising 0.2% (-1.5% y/y) in October. Outlays on gasoline & other energy products fell 1.5% (-4.2% y/y) following a 0.7% decline in October. Real apparel spending declined 0.6% (0.6% y/y) last month, after a 0.2% rise in October and real outlays on food & beverages gained 0.3% (-4.6% y/y) following a 0.2% rise the prior month.

Real spending on household consumer services improved rose 0.3% (3.3% y/y), after a 0.2% (3.1% y/y) rise in October. Real transportation services outlays dropped 1.0% (+1.7% y/y) after a 0.4% rise the prior month, while real housing & utilities expenditures rose 0.3% (1.2% y/y) after a similar 0.3% in October. Real healthcare spending gained 0.3% in last month (2.3% y/y) after a 0.3% rise in October. Recreation services buying declined 0.1% (3.8% y/y) in November following a 0.2% rise in October, while real food services and accommodations rose 0.8% (7.3% y/y) last month after a 0.4% rise in October. Real spending on financial services and insurance rose 0.3% (1.6% y/y) last month after a 0.2% gain in October.

The personal income and consumption figures are available in Haver's USECON database with detail in the USNA database. The Action Economics forecasts are in AS1REPNA.