–Private Wages +$17.9b vs -$9.8b in Aug;Savings Rate 3.6%, Low Since’07
By Joseph Plocek
WASHINGTON (MNI) – The U.S. September Personal Income report shows
that the consumer remains somewhat strapped, and that is not a good
sign for rapid Q4 growth.
September Personal Income rose just 0.1%, Personal Consumption
Expenditures were +0.6%, and Core PCE prices printed flat for +1.6% over
the year. These data are already incorporated into the Q3 GDP report and
should be of limited market interest.
However, the data show a pattern of rebounding buying and a
tendency for the consumer to continue buying in the face of slow income
growth.
Real PCE printed +0.5% after a pause in August and +0.5% in July,
showing a seesaw pattern for Q3 consumption. Buying came at the expense
of saving as September’s $419.8 billion in savings was the lowest since
August 2009. The 3.6% monthly savings rate was down 0.5 point from
August and a low since December 2007’s 2.6%.
The main reasons consumers were forced to save less were slowing
salaries and a continued fall in income from interest-bearing accounts.
Private wages advanced $17.9 billion in September after printing
-$9.8 billion in August. Manufacturing and services pay jumped from
their big declines the prior month, but manufacturing payrolls still
posted -$1.1 billion.
Proprietors’ income, transfers (Medicaid fell less as programs
evidently tightened) and rents gained. But income receipts fell $9.2
billion after -$11.5 billion in August. Income receipts jumped in Q2 but
fell in every month during Q3 as market interest rates declined.
Overall, Q3 income barely gained and this is not a strong set-up
for Q4.
**Market News International Washington Bureau: (202)371-2121**
[TOPICS: MAUDS$,M$U$$$,MT$$$$,MAUDR$]
