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Friday, December 20, 2019

Personal Income increased 0.5% in November, Spending increased 0.4%

by Calculated Risk on 12/20/2019 10:05:00 AM

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

Personal income increased $101.7 billion (0.5 percent) in November according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $87.7 billion (0.5 percent) and personal consumption expenditures (PCE) increased $64.9 billion (0.4 percent).

Real DPI increased 0.4 percent in November, and real PCE increased 0.3 percent. The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.1 percent.
The November PCE price index increased 1.5 percent year-over-year and the November PCE price index, excluding food and energy, increased 1.6 percent year-over-year.

The following graph shows real Personal Consumption Expenditures (PCE) through November 2019 (2012 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 above expectations,  and the increase in PCE was at expectations.

Note that core PCE inflation was up 1.6% YoY.

Using the two-month method to estimate Q4 PCE growth, PCE was increasing at a 2.2% annual rate in Q4 2019. (using the mid-month method, PCE was increasing at 2.3%). This suggests slower PCE growth in Q4 than in Q3.