Updated: 01-Nov-07 11:14 ET
 |
|
| Updated: 01-Nov-07 11:14 ET |
|
Highlights
- September personal income 0.4%, spending 0.3%, core PCE price index 0.2%.
Key Factors
- Income gain of 0.4% leaves a strong and unchanged 6.8% from a year ago.
- Spending rose just 0.3% as August was revised down to 0.5%. Still leaves a powerful 5.6% yoy gain.
- Core PCE prices rose 0.2% as July was revised to that same 0.2%. Annual rate of 1.8% still reflects tame core inflation.
- Overall PCE price growth also rose 0.2% as the rebound to 2.4% yoy is tied to the removal of the year ago decline.
- Savings rate (i.e. post-tax savings / disposable income) edged higher to 0.9%.
Big Picture
- Consumer spending remains on a strong trend despite the drags from energy prices and home prices. The 5.6% yoy pace is owed to the stronger 6.8% annual pace of income growth supported by strong employment and income growth. The Fed's favored core PCE price index stands at 1.8% yoy -- within the Fed's 1% - 2% "comfort zone" but not yet in the safety zone given continued Fed caution. Benchmark revisons now leave a positive savings rate -- savings from after tax income.
| Category |
Sep |
Aug |
Jul |
Jun |
May |
| Personal Income |
|
|
|
|
|
| Total Income |
0.4% |
0.4 |
0.5 |
0.5 |
0.5 |
| Wage and Salary |
0.6 |
0.4 |
0.4 |
0.5 |
0.4 |
| Disposable Income |
0.4 |
0.5 |
0.6 |
0.4 |
0.5 |
| Savings Rate |
0.9% |
0.8 |
0.9 |
0.6 |
0.5 |
| Personal Consumption |
|
|
|
|
|
| Total (Nominal) |
0.3% |
0.5 |
0.4 |
0.2 |
0.5 |
| Durables |
0.2 |
2.5 |
-0.5 |
-1.7 |
1.7 |
| Nondurables |
0.6 |
-0.6 |
0.7 |
-0.1 |
1.6 |
| Services |
0.2 |
0.7 |
0.4 |
0.7 |
-0.1 |
| Total (Real, Chain $) |
0.1% |
0.6 |
0.3 |
0.1 |
0.1 |
| Durables |
0.4 |
2.9 |
-0.4 |
-1.7 |
1.8 |
| Nondurables |
0.3 |
-0.1 |
0.6 |
-0.1 |
0.3 |
| Services |
-0.1 |
0.5 |
0.2 |
0.5 |
-0.4 |
| Core PCE Deflator |
|
|
|
|
|
| Month/Month |
0.2% |
0.1 |
0.2 |
0.1 |
0.1 |
| Year/Year |
1.8% |
1.8 |
1.9 |
1.9 |
2.0 |
Free $50,000 Demo Account
