Monday, June 01, 2015

Personal Income increased 0.4% in April, Spending decreased slightly

by Bill McBride on 6/01/2015 08:38:00 AM

The BEA released the Personal Income and Outlays report for April:

Personal income increased $59.4 billion, or 0.4 percent ... in April, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $2.6 billion, or less than 0.1 percent.
...
Real PCE -- PCE adjusted to remove price changes -- decreased less than 0.1 percent in April, in contrast to an increase of 0.4 percent in March. ... The price index for PCE increased less than 0.1 percent in April, compared with an increase of 0.2 percent in March. The PCE price index, excluding food and energy, increased 0.1 percent in April, the same increase as in March.

The April price index for PCE increased 0.1 percent from April a year ago. The April PCE price index, excluding food and energy, increased 1.2 percent from April a year ago.
The following graph shows real Personal Consumption Expenditures (PCE) through April 2015 (2009 dollars). Note that the y-axis doesn't start at zero to better show the change.

Personal Consumption Expenditures Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

The increase in personal income was slightly higher than expected,  The change in PCE was below the 0.2% increase consensus.

On inflation: The PCE price index increased 0.1 percent year-over-year due to the sharp decline in oil prices. The core PCE price index (excluding food and energy) increased 1.2 percent year-over-year in April.

For PCE, Q2 is off to a slow start.