This Morning’s Key Economic Data - Personal Income and Spending (September 2010)
November 1, 2010 – This Morning’s Key Economic Data – Personal Income and Spending (September 2010) – The income and spending numbers both came in worse than expected, which, under the current conventional way of thinking that the economy needs more stimulus, should give the Fed more impetus for QE2.
Personal Income and Outlays, September 2010
Personal income decreased $16.8 billion, or 0.1 percent, and disposable personal income (DPI) decreased $20.3 billion, or 0.2 percent, in September, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $17.3 billion, or 0.2 percent. In August, personal income increased $54.4 billion, or 0.4 percent, DPI increased $47.9 billion, or 0.4 percent, and PCE increased $52.5 billion, or 0.5 percent, based on revised estimates.
Real disposable income decreased 0.3 percent in September, in contrast to an increase of 0.2 percent in August. Real PCE increased 0.1 percent, compared with an increase of 0.3 percent.
The September change in personal income reflects provisions of unemployment compensation legislation, which had boosted emergency government unemployment benefits (within current transfer receipts) in August.
Excluding emergency government unemployment insurance benefits, which are discussed more fully below, personal income increased $8.7 billion, or 0.1 percent, in September, following an increase of $33.9 billion,or 0.3 percent, in August.
Wages and salaries
Private wage and salary disbursements increased $3.3 billion in September, compared with an increase of $23.6 billion in August. Goods-producing industries' payrolls decreased $1.6 billion, in contrast to an increase of $6.7 billion; manufacturing payrolls decreased $1.0 billion, in contrast to an increase of $2.3 billion. Services-producing industries' payrolls increased $5.0 billion, compared with an increase of $16.8 billion. Government wage and salary disbursements decreased $4.8 billion, compared with a decrease of $8.2 billion.
Other personal income
Supplements to wages and salaries increased $2.4 billion in September, compared with an increase of $4.2 billion in August.Proprietors' income increased $5.6 billion in September, compared with an increase of $10.5 billion in August.
Farm proprietors' income increased $4.8 billion, the same increase as in August. Nonfarm proprietors' income increased $0.9 billion in September, compared with an increase of $5.7 billion in August.
Rental income of persons increased $3.7 billion in September, compared with an increase of $3.1 billion in August. Personal income receipts on assets (personal interest income plus personal dividend income) decreased $5.7 billion, compared with a decrease of $10.7 billion.
Personal current transfer receipts decreased $21.5 billion in September, in contrast to an increase of $35.1 billion in August. The September change reflected the effects of unemployment compensation legislation, which reduced emergency unemployment insurance benefits by $25.5 billion at an annual rate in September, after boosting benefits by $20.5 billion in August. Contributions for government social insurance -- a subtraction in calculating personal income – decreased $0.1 billion in September, in contrast to an increase of $3.0 billion in August.
Personal current taxes and disposable personal income
Personal current taxes increased $3.5 billion in September, compared with an increase of $6.5 billion in August. Disposable personal income (DPI) -- personal income less personal current taxes – decreased $20.3 billion, or 0.2 percent, in September, in contrast to an increase of $47.9 billion, or 0.4 percent in August.
Personal outlays and personal saving
Personal outlays -- PCE, personal interest payments, and personal current transfer payments -- increased$14.1 billion in September, compared with an increase of $49.2 billion in August. PCE increased $17.3 billion, compared with an increase of $52.5 billion.Personal saving -- DPI less personal outlays -- was $607.6 billion in September, compared with $642.0 billion in August.
Personal saving as a percentage of disposable personal income was 5.3 percent in September, compared with 5.6 percent 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 0.3 percent in September, in contrast to an increase of 0.2 percent in August.
Real PCE -- PCE adjusted to remove price changes -- increased 0.1 percent in September, compared with an increase of 0.3 percent in August. Purchases of durable goods increased 0.8 percent, compared with an increase of less than 0.1 percent. Purchases of nondurable goods decreased 0.2 percent, in contrast to an increase of 0.8 percent. Purchases of services increased 0.1 percent, compared with an increase of 0.2 percent.
PCE price index -- The price index for PCE increased 0.1 percent in September, compared with an increase of 0.2 percent in August. The PCE price index, excluding food and energy, increased less than 0.1 percent, compared with an increase of 0.1 percent.
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.
