Personal Income: Modest Income and Spending Gains

May 31, 2016
Bottom Line: Both personal and disposable income rose modestly in April. Real consumer spending rose 1.9% from Q4 to Q1 -- this quarter (with only April available so far) looks to be growing at 3% annualized, indicating consumer spending picked up at the beginning of the quarter. Finally, consumer inflation rose modestly year-over-year. Personal Income ROSE by 0.4% in April, in line with market expectations. Personal Income is now 4.4% ABOVE its year ago level. Wages and Salaries ROSE by 0.5% and are now 5.2% ABOVE year ago levels. Personal Tax Payments ROSE by 0.3% and are now 4.2% ABOVE their year ago level, reflecting the year-on-year rebounds in employment and income. Disposable Income ROSE by 0.5% and is now 4.4% ABOVE its year ago level. Consumer Spending ROSE by 1.0%, compared with market expectations of an increase of 0.3%. There were modest increases in durable goods, nondurable goods and services spending. Spending is now 4.1% ABOVE its year ago level. The Saving Rate FELL by 0.5 points to 5.4%. The PCE Price Index ROSE by 0.3% and is now 1.1% ABOVE its year ago level. Meanwhile, the Core PCE Index ROSE by 0.2% and is now 1.6% ABOVE its year ago level. Core consumer inflation had been on a slowing trend until October 2015 but is now rising modestly. Real Consumer Spending ROSE by 0.6% and is now 3.0% ABOVE its year ago level. The April level is 3.0% annualized above its Q1 level.
Article by contingentmacro