Updated: 01-Oct-20 09:23 ET
| September Personal Income and Spending |
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| Updated: 01-Oct-20 09:23 ET |
Highlights
- Personal income declined 2.7% m/m in August (Briefing.com consensus -2.0%) following an upwardly revised 0.5% increase (from 0.4%) in July.
- Personal spending increased 1.0% (Briefing.com consensus 0.6%) following a downwardly revised 1.5% increase (from 1.9%) in July.
- The PCE Price Index and Core PCE Price Index were both up 0.3% m/m, as expected. That left the year-over-year increases for the Fed's preferred inflation gauge at 1.4% and 1.6%, respectively.
Key Factors
- Wages and salaries increased 1.3% m/m.
- Personal current transfer receipts plunged 14.8%, paced by a $686.9 billion decrease in unemployment insurance.
- Real disposable personal income declined 3.5% after being unchanged in July.
- Real personal consumption expenditures were up 0.7% after increasing 1.1% in July.
Big Picture
- The expiration of enhanced unemployment benefits helps explain the big drop in personal income, yet the key takeaway from the report is that consumers appear to be spending more out of savings now, evidenced by the increase in spending and the concurrent drop in the personal savings rate (to 14.1% from 17.7%).
| Category | AUG | JUL | JUN | MAY | APR |
| Personal Income | |||||
| Total Income | -2.7% | 0.5% | -1.2% | -4.2% | 12.2% |
| Wage and Salary | 1.3% | 1.3% | 2.1% | 2.7% | -7.8% |
| Disposable Income | -3.2% | 0.3% | -1.5% | -4.8% | 14.8% |
| Savings Rate | 14.1% | 17.7% | 18.7% | 24.5% | 33.6% |
| Personal Consumption | |||||
| Total (Nominal) | 1.0% | 1.5% | 6.5% | 8.7% | -12.7% |
| Total (Real, Chain $) | 0.7% | 1.1% | 5.9% | 8.5% | -12.3% |
| Core PCE Deflator | |||||
| Month/Month | 0.3% | 0.4% | 0.3% | 0.2% | -0.4% |
| Year/Year | 1.6% | 1.4% | 1.1% | 1.0% | 0.9% |