Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  Personal Income Increased 0.3% in April
Posted Under: Data Watch • Inflation • PIC
Supporting Image for Blog Post

 
Implications: After March, when consumers increased spending at the fastest pace in almost five years, consumers took a breather in April, with spending slipping 0.1%. This is not a big deal. Despite the slight decline in April, spending is up at a 6.1% annual rate in the past three months and a 4.7% rate in the past six months. These are faster than the 4.3% gain in the past year, so the underlying trend appears to be accelerating. Personal income matched expectations, rising 0.3% in April and is up 3.6% from a year ago. The gain in income was led by private-sector wages & salaries which were up 0.3% in April and are up 4.2% from a year ago. Over the past three months, private-sector wages & salaries have also accelerated, up at a 5.5% annual rate. We expect both income and spending to keep growing at a healthy clip. Job growth continues and we expect payroll gains of around 200,000 for May. Meanwhile, as unemployment gradually declines, employers will offer higher wages. In addition, consumers' financial obligations are hovering at the smallest share of income since the early 1980s. (Financial obligations are money used to pay mortgages, rent, car loans/leases, as well as debt service on credit cards and other loans.) On the inflation front, the Federal Reserve's favorite measure of inflation, the personal consumption price index, was up 0.2% in April, the same as "core" consumption prices, which exclude food and energy. Overall consumption prices and core prices are up 1.6% and 1.4%, respectively, in the past year, both below the Fed's 2% target. But, as recently as October 2013 PCE prices were up only 0.8% from a year ago and we expect to hit the 2% target by year end, putting pressure on the Federal Reserve to start raising interest rates sometime in the first half of 2015. In other news this morning, the Chicago PMI, which measures manufacturing sentiment in that key region, increased to 65.5 in May from 63.0 in April. As a result, we expect the national ISM Manufacturing report (to be released Monday) to increase to 55.9 in May from 54.9 in April. After a winter lull, the Plow Horse economy is picking up her pace.

Click here for PDF version
Posted on Friday, May 30, 2014 @ 10:13 AM • Post Link 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.
Search Posts
 PREVIOUS POSTS
Real GDP Was Revised to a -1.0% Annual Rate in Q1
The Myth of 2008
How Can Transportation Orders Go Up When Autos and Aircraft Were Both Down?
New Orders For Durable Goods Increased 0.8% in April
Dude, Don't Fret Q1 Drop in GDP
New single-family home sales rose 6.4% in April
Existing Home Sales Rose 1.3% in April to a 4.65 Million Annual Rate
Can a "Perma-Bull" Turn Bearish?
Housing Starts Increased 13.2% in April to 1.072 Million Units at an Annual Rate
The Consumer Price Index (CPI) Increased 0.3% in April
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011
Expand 20102010

Search by Topic
Skip Navigation Links.

 
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.
Follow First Trust:  
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 © 2024 All rights reserved.