–Private Wages +$15.5b vs +$5.9b in Nov, as Mfg Wages Rebound
By Joseph Plocek
WASHINGTON (MNI) – The December Personal Income report comes as an
anticlimax after its data were already incorporated into the Q4 GDP
report, but it does show the economy maintains momentum going into Q1.
December personal income printed +0.4%, Personal Consumption
Expenditures +0.7%, and core PCE prices flat for +0.7% over the year,
all slightly better than expected. Spending seems to have seesawed in
Q4, rising faster at the beginning and end of the period than in the
middle.
Higher spending seems to have stemmed from lower savings, as the
savings rate reached 5.3%, a low since August 2009. The Commerce
Department said this was because the savings pace of $614.1 billion was
the lowest since March.
Private wages advanced $15.5 billion after posting +$5.9 billion in
November. Manufacturing payrolls turned positive.
Supplements, proprietors’ income, rents, income on assets, and
transfers all gained, showing positive momentum going forward. Income
receipts (interest and dividends) are again growing after the recession
cut this income.
Spending was boosted by +1% in real durables after -0.2% in
November. Auto and renovation spending gained. Spending on nondurables
and services grew at a trend pace.
PCE core prices are now registering flat in five of the last six
months, a sign of no significant price pressures. PCE core prices at
+0.7% for the year is the slowest since the series began in 1959.
January spending appears to be slowing a bit but not significantly,
and Q1 is on track for a sustaining expansion. Auto and department sales
data due this week will give a more specific reading on how fast the
economy is advancing in 2011.
**Market News International Washington Bureau: (202)371-2121**
[TOPICS: MAUDS$,M$U$$$,MT$$$$,MAUDR$]
