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Personal Income: Flat in Nov as Wages and Salaries Fell

December 22, 2016
Bottom Line: Personal income and disposable income were unchanged in November. Wages and salaries fell modestly in November while personal interest income and rental income mostly offset those declines. Real consumer spending rose 2.9% from Q2 to Q3 -- this quarter (with only October and November available so far) looks to be growing at only 2.0% annualized, indicating consumers are still spending cautiously. Finally, core PCE fell from 1.8% year-on-year to 1.6%, failing to eclipse 2%, a level it hasn't seen since early 2012.

Personal Income was UNCHANGED in November, compared with market expectations for an increase of 0.3%. The prior month was revised lower from 0.6% to 0.5%. Personal Income is now 3.5% ABOVE its year ago level.

Wages and Salaries FELL by 0.1%, Wages are now 3.5% ABOVE year ago levels. Personal Tax Payments ROSE by 0.1% and are now 2.2% ABOVE their year ago level, reflecting the year-on-year changes in employment and income.

Disposable Income FELL by 0.01% and is now 3.7% ABOVE its year ago level. Consumer Spending ROSE by 0.2%, compared with market expectations of an increase of 0.3% The prior month was revised higher. There were modest decline in durable goods, small increases in nondurable goods spending and small increases in services spending. Spending is now 4.2% ABOVE its year ago level.

The Saving Rate FELL by 0.2 points to 5.5%.

The PCE Price Index is UNCHANGED and is now 1.4% ABOVE its year ago level. Meanwhile, the Core PCE Index was UNCHANGED by 0.0% and is now 1.6% ABOVE its year ago level.

Real Consumer Spending ROSE by 0.1% and is now 2.8% ABOVE its year ago level. The October/November average is 2.0% annualized above its Q3 level.