–Pvt Wages +$24.4B But Transfers Fell; In PCE, Real Nondurables -0.1%
By Joseph Plocek
WASHINGTON (MNI) – The weak April personal income report is
probably a reflection of the early Easter holiday rather than a
fundamental slowing in growth.
April Personal Income printed +0.4%, Personal Consumption
Expenditures flat (its smallest since September 2009), and core PCE
prices +0.1% for +1.2% over the year, mainly a little weaker than
expected.
Real PCE was flat for this one month after posting +3.5% in Q1,
suggesting a possible slowing in spending (even as April’s level remains
above the Q1 average). Real nondurables at -0.1% was especially weak,
but perhaps was due to an early Easter.
Private wages advanced $24.4 billion after +$13.7 billion in March,
on broad gains across categories. This suggests consumers still have the
wherewithal to spend.
In other income, proprietors’ income, rents, and income receipts
all gained; transfers were $4.8 billion lower. This comes after +$35.4
billion in March on the back of emergency unemployment benefits, and
was probably just a statistical retracement.
The savings rate was 3.6%, up from 3.1% in March. Consumers
appeared to save rather than spend during the month.
A bottom line is that increasing income should lift spending ahead
and April’s one-month flat consumption reading should be lifted. It is
unlikely that rising incomes will be consistent with a double-dip in
growth.
**Market News International Washington Bureau: (202)371-2121**
[TOPICS: MAUDS$,MFU$$$,MGU$$$,MAUDR$]
