Tuesday, July 31, 2012

Personal Income increased 0.5% in June, Spending decreased slightly

by Calculated Risk on 7/31/2012 08:30:00 AM

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

Personal income increased $61.8 billion, or 0.5 percent ... in June, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $1.3 billion, or less than 0.1 percent.
...
Real PCE -- PCE adjusted to remove price changes -- decreased 0.1 percent in June, in contrast to an increase of 0.1 percent in May. ... PCE price index -- The price index for PCE increased 0.1 percent in June, in contrast to a decrease of 0.2 percent in May. The PCE price index, excluding food and energy, increased 0.2 percent, compared with an increase of 0.1 percent.
...
Personal saving -- DPI less personal outlays -- was $529.5 billion in June, compared with $472.4 billion in May. The personal saving rate -- personal saving as a percentage of DPI -- was 4.4 percent in June, compared with 4.0 percent in May.
The following graph shows real Personal Consumption Expenditures (PCE) through June (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.

This graph shows real PCE by month for the last few years. The dashed red lines are the quarterly levels for real PCE.

A key point is the PCE price index has only increased 1.5% over the last year, and core PCE is up 1.8%.