The attached file contains this articles commentary as well as tables and charts of the data.
Personal Income: Income Growth Steady as Core PCE Declines
September 29, 2017
Bottom Line: With modest incomes gains, consumers continued to spend cautiously in August, less than expected. Real consumer spending rose 3.2% from Q1 to Q2 -- this quarter (with only July and August available so far) looks to be growing at only 1.4% annualized. Core PCE rose just 0.1%, also a touch less than expected, and was up 1.3% annualized over the last 3 months. That is modestly faster than the last 6 months (just +0.9%), but in-line with the average of the last 12-months (1.3%) and slower than the average of 2016 (1.9%).
Personal Income ROSE by 0.2% in August, compared with market expectations for an increase of 0.2%. The prior month was revised lower from 0.40% to 0.34%. Personal Income is now 2.8% ABOVE its year ago level.
Wages and Salaries were UNCHANGED. Wages are now 2.7% ABOVE year ago levels. Personal Tax Payments ROSE by 0.7% and are now 3.4% ABOVE their year ago level, reflecting the year-on-year changes in employment and income.
Disposable Income ROSE by 0.1% and is now 2.7% ABOVE its year ago level.
Consumer Spending ROSE by 0.1%, compared with market expectations of an increase of 0.1% The prior month was revised lower. There were modest declines in durable goods, small increases in nondurable goods spending and small increases in services spending. Spending is now 3.9% ABOVE its year ago level.
The Saving Rate was UNCHANGED at 3.6%. The PCE Price Index ROSE by 0.2% and is now 1.4% ABOVE its year ago level. Meanwhile, the Core PCE Index ROSE by 0.1% and is now 1.3% ABOVE its year ago level.
Real Consumer Spending FELL by -0.1% and is now 2.5% ABOVE its year ago level. The July/August average is 1.4% annualized above its Q2 level.