Archive for September, 2012

Real Consumer Spending Slows in August

Personal income increased 0.1 percent in August, the same increase as in July.

Wages and salaries, the largest component of personal income, increased 0.1 percent in August after increasing 0.1 percent in July. Government social benefits to persons turned down in August.

Current-dollar disposable personal income (DPI), after-tax income, increased 0.1 percent in August, the same increase as in July.
Real DPI, income adjusted for taxes and inflation, decreased 0.3 percent in August after increasing 0.1 percent in July.

Real consumer spending, spending adjusted for price changes, increased 0.1 percent in August after increasing 0.4 percent in July. Spending on nondurable goods rose 0.3 percent after increasing 0.6 percent, while spending on services decreased 0.1 after increasing 0.3.

PCE prices increased 0.4 percent in August after remaining flat in July. Excluding food and energy, the PCE price index increased 0.1 percent, the same as in July.

Personal saving rate
Personal saving as a percent of DPI was 3.7 percent in August, compared with 4.1 percent
in July.

GDP Growth Slows in Second Quarter

Real gross domestic product (GDP) rose 1.3 percent in the second quarter of 2012 after rising 2.0 percent in the first quarter, according to the third estimate released today by the Bureau of Economic Analysis. The second quarter growth rate was revised down from the second estimate released in August.

Second-quarter highlights

• Consumer spending decelerated, reflecting a downturn in durable goods, mainly in autos.
• Business investment slowed, led by a downturn in spending for power and communication structures.
• Residential housing also slowed in the second quarter.

Offsetting these reductions in real GDP growth were smaller decreases in federal government spending and in state and local government spending as well as a step-up in exports.

Revisions to GDP
The downward revision to second-quarter real GDP growth reflected a downward revision to inventories, mainly to farm inventories, which were revised down due to this summer’s severe heat and drought. In addition, consumer spending for services was revised down, reflecting a downward revision to finance and insurance. Exports was revised down as well.

Personal income and saving
Real disposable personal income (DPI), which adjusts personal income for taxes and inflation, rose 3.1 percent in the second quarter, compared with 3.7 percent in the first quarter. The personal saving rate—personal saving as a percentage of DPI—rose to 4.0 percent from 3.6 percent.

Corporate profits
Second-quarter corporate profits turned up, rising 1.1 percent at a quarterly rate, following a 2.7 percent decline in the first quarter. Second-quarter nonfinancial profits rose 2.6 percent, and financial profits fell 9.3 percent. Profits from the rest of the world rose 8.3 percent in the second quarter, reflecting a 1.6 percent increase in receipts and a 10.3 percent decline in payments.

For more, here’s the full report.

State Personal Income: Second Quarter 2012

State personal income growth slowed to 1.0 percent in the second quarter of 2012 from 1.7 percent in the first quarter. Growth slowed in 39 states plus the District of Columbia, accelerated in 10, and was unchanged in Nevada. Personal income growth ranged from 2.1 percent in North Dakota to 0.4 percent in New Mexico. Inflation, as measured by the national price index for personal consumption expenditures, slowed to 0.2 percent in the second quarter from 0.6 percent in the first quarter.

For more information about state personal income, read the full report.