Monday, April 29, 2013

Personal Income increased 0.2% in March, Core PCE prices up 1.1% year-over-year

by Calculated Risk on 4/29/2013 08:30:00 AM

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

Personal income increased $30.9 billion, or 0.2 percent ... in March, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $21.0 billion, or 0.2 percent.
...
Real PCE -- PCE adjusted to remove price changes -- increased 0.3 percent in March, the same increase as in February. ... PCE price index -- The price index for PCE decreased 0.1 percent in March, in contrast to an increase of 0.4 percent in February. The PCE price index, excluding food and energy, increased less than 0.1 percent, compared with an increase of 0.1 percent.
...
Personal saving -- DPI less personal outlays -- was $329.1 billion in March, compared with $330.9 billion in February. The personal saving rate -- personal saving as a percentage of disposable personal income -- was 2.7 percent in March, the same as in 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.

This graph shows real PCE by month for the last few years. The dashed red lines are the quarterly levels for real PCE.   PCE for both January and February were revised down slightly.

As reported on Friday in the advance GDP report, PCE increased at a 3.2% annual rate in Q1. 

A key point is that the PCE price index was only up 1.0% year-over-year (1.1% for core PCE).   Core PCE increased at a 0.4% annualized rate in March.  This will put pressure on the Fed to do more.