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Friday, April 29, 2011

Personal Income and Outlays Report for March

by Calculated Risk on 4/29/2011 08:30:00 AM

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

Personal income increased $67.0 billion, or 0.5 percent ... Personal consumption expenditures (PCE) increased $60.7 billion, or 0.6 percent.
Real PCE -- PCE adjusted to remove price changes -- increased 0.2 percent in March, compared with an increase of 0.5 percent in February.
Real PCE was revised up significantly for both January and February.

The following graph shows real Personal Consumption Expenditures (PCE) through March (2005 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 in graph gallery.

PCE increased 0.5% in March, but real PCE only increased 0.2% as the price index for PCE increased 0.4 percent in March.

Note: Core PCE - PCE excluding food and energy - increased 0.1% in March.

Personal Income less TransferThe second graph shows real personal income less transfer payments as a percent of the previous peak. This has been slow to recover - and real personal income less transfer payments declined slightly in March. This remains 3.1% below the previous peak.

The personal saving rate was unchanged at 5.5% in March.
Personal saving -- DPI less personal outlays -- was $651.2 billion in March, compared with $647.5 billion in February. Personal saving as a percentage of disposable personal income was 5.5 percent in March, the same as in February.
Personal Saving rate This graph shows the saving rate starting in 1959 (using a three month trailing average for smoothing) through the March Personal Income report.

One of the surprises in the Q1 GDP report was the 2.7% annualized growth rate for PCE. PCE growth in January and February was revised up significantly, and PCE in March increased at a 3.1% annualized rate (over the last 3 months).