Tuesday, May 31, 2016

Personal Income increased 0.4% in April, Spending increased 1.0%

by Bill McBride on 5/31/2016 08:36:00 AM

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

Personal income increased $69.8 billion, or 0.4 percent ...in April, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $119.2 billion, or 1.0 percent.
...
Real PCE -- PCE adjusted to remove price changes -- increased 0.6 percent in April, in contrast to a decrease of less than 0.1 percent in March. ... The price index for PCE increased 0.3 percent in April, compared with an increase of 0.1 percent in March. The PCE price index, excluding food and energy, increased 0.2 percent, compared with an increase of 0.1 percent.

The April PCE price index increased 1.1 percent from April a year ago. The April PCE price index, excluding food and energy, increased 1.6 percent from April a year ago.
The following graph shows real Personal Consumption Expenditures (PCE) through April 2016 (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 at consensus expectations.  And the increase in PCE was above the consensus. A solid start for Q2.

On inflation: The PCE price index increased 1.1 percent year-over-year due to the sharp decline in oil prices. The core PCE price index (excluding food and energy) increased 1.6 percent year-over-year in April.