–Private Wages -$2.2b vs +$15b in May; Savings Rate 5.4%
By Joseph Plocek
WASHINGTON (MNI) – The U.S. June Personal Income report confirms a
slower economy, already known from the revisions in the latest GDP
report, but the monthly pattern of nominal income and spending shows a
deceleration during the second period.
June Personal Income printed +0.1% in its smallest gain since
September 2010. Personal Consumption Expenditures printed -0.2%, and PCE
core prices printed +0.1% for +1.3% over the year.
The Q2 pattern in PCE is now: +0.2% for April, +0.1% for May, and
-0.2% for June, a declining trend that suggests Q3 will start
slowly. Real spending slipped in April and May and was flat in June.
Other information showed June private wages fell $2.2 billion as
manufacturing and services wages dipped simultaneously. Government wages
also fell. In contrast, private wages were up $15 billion in May.
Proprietors’ income and rents fell, while transfers and income
receipts rose in June. Wage supplements increased, and social insurance
payments (a subtraction from wages) fell $0.2 billion. Even with these
boosts, income was weak.
Savings jumped $39 billion to its highest amount since August 2010,
putting the personal savings rate at 5.4%, up 0.4 point on the month.
Overall, the report shows the consumer pulled back.
Annual revisions cut 2008-10 income, though rents were revised
higher in some cases. This should not surprise since GDP revisions
showed the recession was deeper than previously thought.
**Market News International Washington Bureau: (202)371-2121**
[TOPICS: MAUDS$,M$U$$$,MT$$$$,MAUDR$]
