Personal Spending Jumps 0.8%, Outpaces Income

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Photo: 401(K) 2012 / Flickr

The Bureau of Economic Analysis just released the September personal and spending figures.Spending climbed 0.8%, which was ahead of economists’ expectation for a 0.6% gain.

Income climbed 0.4%, which was right in line with expectations.

Dow futures were down 90 points ahead of the report, and they haven’t budged in the minutes following the data release.

From the BEA release:

Personal income increased $48.1 billion, or 0.4 per cent, and disposable personal income (DPI)
increased $43.0 billion, or 0.4 per cent, in September, according to the Bureau of Economic analysis. Personal consumption expenditures (PCE) increased $87.9 billion, or 0.8 per cent.  In August, personal income increased $17.8 billion, or 0.1 per cent, DPI increased $15.1 billion, or 0.1 per cent, and PCE increased $59.9 billion, or 0.5 per cent, based on revised estimates.

Real disposable income decreased less than 0.1 per cent in September, compared with a decrease of 0.3 per cent in August.  Real PCE increased 0.4 per cent, compared with an increase of 0.1 per cent.

Wages and salaries

Private wage and salary disbursements increased $19.5 billion in September, compared with an increase of $4.1 billion in August.  Goods-producing industries’ payrolls increased $2.9 billion, in contrast to a decrease of $7.2 billion; manufacturing payrolls increased $0.5 billion, in contrast to a decrease of $6.3 billion.  Services-producing industries’ payrolls increased $16.6 billion, compared with an increase of $11.3 billion.  Government wage and salary disbursements increased $1.4 billion, compared with an increase of $2.8 billion.

Other personal income

Supplements to wages and salaries increased $4.7 billion in September, compared with an increase of $3.3 billion in August.

Proprietors’ income increased $13.2 billion in September, compared with an increase of $8.6 billion in August. Farm proprietors’ income increased $3.9 billion in September, the same increase as in August.  Nonfarm proprietors’ income increased $9.4 billion in September, compared with an increase of $4.8 billion in August.

Rental income of persons increased $5.1 billion in September, compared with an increase of $5.0 billion in August. Personal income receipts on assets (personal interest income plus personal dividend income) decreased $5.7 billion, compared with a decrease of $3.9 billion.

Personal current transfer receipts increased $12.7 billion in September, in contrast to a decrease of $1.6 billion in August.  Within current transfer receipts, government social benefits to persons for social security benefits increased $14.0 billion, in contrast to a decrease of $2.4 billion.

Contributions for government social insurance — a subtraction in calculating personal income — increased $2.8 billion in September, compared with an increase of $0.7 billion in August.

Personal current taxes and disposable personal income

Personal current taxes increased $5.2 billion in September, compared with an increase of $2.5 billion in August. Disposable personal income (DPI) — personal income less personal current taxes — increased $43.0 billion, or 0.4 per cent, in September, compared with an increase of $15.1 billion, or 0.1 per cent, in August.

Personal outlays and personal saving

Personal outlays — PCE, personal interest payments, and personal current transfer payments — increased $93.1 billion in September, compared with an increase of $65.0 billion in August.  PCE increased $87.9 billion, compared with an increase of $59.9 billion.

Personal saving — DPI less personal outlays — was $395.0 billion in September, compared with $445.1 billion in August.  The personal saving rate — personal saving as a percentage of disposable personal income — was 3.3 per cent in September, compared with 3.7 per cent in August. For a comparison of personal saving in BEA’s national income and product accounts with personal saving in the Federal Reserve Board’s flow of funds accounts and data on changes in net worth, go to http://www.bea.gov/national/nipaweb/Nipa-Frb.asp.

Real DPI, real PCE and price index

Real DPI — DPI adjusted to remove price changes  — decreased less than 0.1 per cent in September, compared with a decrease of 0.3 per cent in August.

Real PCE — PCE adjusted to remove price changes — increased 0.4 per cent in September, compared with an increase of 0.1 per cent in August.  Purchases of durable goods increased 1.3 per cent, compared with an increase of 1.5 per cent.  Purchases of nondurable goods increased 0.5 per cent, compared with an increase of 0.4 per cent. Purchases of services increased 0.2 per cent, in contrast to a decrease of 0.2 per cent.

The price index for PCE increased 0.4 per cent in September, the same increase as in August.  The PCE price index, excluding food and energy, increased 0.1 per cent in September, the same increase as in August.

Revisions

Estimates have been revised for July and August.  Changes in personal income, current-dollar and chained (2005) dollar DPI, and current-dollar and chained (2005) dollar PCE for July and August — revised and as published in last month’s release — are shown below.

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