Tag Archives: Income and spending

Personal income, spending, and prices: consumer remains strong, inflation close to 2% target no matter how you measure it  – by New Deal democrat I am on the road today, so I will have to keep this brief. In June nominal personal income rose 0.3%, and spending rose 0.2%. Since PCE inflation rose less than 0.1%, real income rose 0.2% and real spending rose 0.1%. Since spending on services tends to rise even during recessions, the more...

 – by New Deal democrat Personal income and spending have become one of the two most important monthly reports I follow. This is in large part because the big question this year is whether the contractionary effects of Fed tightening have just been delayed until this year, or whether the fact that there have been no rate hikes since last summer mean that the expansion will strengthen. Because real personal spending on services for the past 50...

Strong personal income and spending contrast with near record low in saving  – by New Deal democrat Like retail sales earlier in November, personal income and spending both rose smartly, as shown in the below graph of real retail sales compared with real personal spending: Real personal income was up 0.4%, and real personal spending increased 0.5%: Nominally each increased 0.3% more; i.e., the PCE deflator was 0.3%. Each metric only had...

Real personal income and spending decline in May, while the saving rate increases (not good!) In May nominal personal income rose 0.5%, and spending rose 0.2%. But since the personal consumption deflator, i.e., the relevant measure of inflation, rose 0.6%, real income fell -0.1%, and real personal spending fell -0.4%. While both real income and spending are well above their pre-pandemic levels, I have stopped comparing them with that, but...