–Data Suggest Modest Start to Q3 Real GDP Growth; Savings 5.9%
By Joseph Plocek
WASHINGTON (MNI) – The July Personal Income report suggests modest
real growth at the start of Q3 as income rebounded and spending resumed
at a modest pace.
July Personal Income printed +0.2%, Personal Consumption +0.4%, and
Core PCE Prices +0.1% for +1.4% over the year, all about as expected.
Real PCE was just +0.2%, a very modest start to Q3 real growth
which is indicated at perhaps 2% or so from this report.
Private wages advanced $23.3 billion after -$5 billion in June, as
manufacturing and services pay jumped. Slowing in income elsewhere was
due to -$1.1 billion in government wages, reflecting a drop in temporary
census workers. This subtracted -$1.4 billion in July and -$3.4 billion
in June from overall wages at annual rates.
Disposable personal income grew 0.2% but was -0.1% on a real basis
in its first drop since January. Taxes and social insurance payments
both advanced.
Wage supplements, transfers, proprietors’ income, and rents gained,
but income receipts fell as interest rates declined.
The savings rate was 5.9% after 6.2% in June. Saving has steadily
increased in the last five years, perhaps showing caution as home prices
peaked and dipped.
Real spending data show gains in both services and goods. Real
spending on durables jumped 1.2% after three months of decline,
reflecting decent auto sales. Real spending on nondurables was -0.3% in
a continued seesaw, and real spending on services advanced 0.2%.
**Market News International Washington Bureau: (202)371-2121**
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