Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  Personal income increased 0.3% in January while personal consumption rose 0.2%
Posted Under: Data Watch • PIC

 
Implications:  Personal income and spending were up modestly in January itself, with both rising but moving up less than the consensus expected.  However, consistent with yesterday's update on quarterly GDP and income, prior months were revised up.  As a result, income was 1% higher than we previously thought, while spending was 0.4% higher.  "Real" (inflation-adjusted) consumer spending was unchanged in January, just like November and December.  But this recent trend is unlikely to last.  Excluding transfer payments, "real" (inflation–adjusted) personal income was up 0.2% in January and up 1.9% from a year ago.  Meanwhile, in the past year, real private-sector wages and salaries plus real small business profits are up 3.2% - that means this income is rising 3.2% faster than inflation.  In addition to these income gains, consumer spending will be supported by the large reduction in households' financial obligations the past few years.  Recurring payments like mortgages, rent, car loans/leases, as well as other debt service, are now the smallest share of after-tax income since 1993. On the inflation front, overall consumption prices are up 2.4% in the past year, above the Fed's supposed target of 2%.  "Core" prices are up 1.9% from a year ago, the most since 2008.  Given the loose stance of monetary policy, we expect inflation to accelerate in the year ahead, both overall and for the core. In other news this morning, new claims for unemployment insurance declined 2,000 last week to 351,000.  The four-week average dropped to 354,000, the lowest since March 2008.  Continuing claims dipped 2,000 to 3.40 million, the lowest since August 2008.  These data suggest we had another month of robust payroll growth in February.

Click here for a printable version.
Posted on Thursday, March 1, 2012 @ 9:42 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2021 All rights reserved.