Archive for November, 2012

Real Consumer Spending Falls in October

PersonalIncomeOctoberPersonal income remained flat in October after increasing 0.4 percent in September. Wages and salaries decreased 0.2 percent in October after increasing 0.3 percent in September. The October decrease reflected work interruptions caused by Hurricane Sandy, which reduced wages and salaries by 0.3 percent. For more information, see the personal income news release.

Current-dollar disposable personal income (DPI), after-tax income, remained flat in October after increasing 0.4 percent in September.

Real DPI, income adjusted for taxes and inflation, fell 0.1 percent in October after remaining flat in September.

Real consumer spending, spending adjusted for price changes, fell 0.3 percent in October after rising 0.4 percent in September. The decline was the largest since September 2009. Spending on durable goods fell 1.7 percent in October after rising 2.2 percent in September.

PCE prices increased 0.1 percent in October after increasing 0.3 percent in September. Excluding food and energy, the PCE price index increased 0.1 percent in October, the same increase as in September.

Personal saving rate
Personal saving as a percent of DPI was 3.4 percent in October, compared with 3.3 percent in September.

GDP Growth Accelerates in Third Quarter

Real gross domestic product (GDP) increased 2.7 percent in the third quarter of 2012 after increasing 1.3 percent in the second quarter, according to estimates released today by the Bureau of Economic Analysis. The third-quarter growth rate was revised up 0.7 percentage point from the advance estimate released in October.

Real GDP third-quarter highlights
The acceleration in third-quarter growth was mainly driven by a rebound in inventory investment. Nonfarm inventory investment turned up. In contrast, farm inventory investment declined more than in the second quarter, reflecting the drought in the Midwest.

In addition, consumer spending on durable goods turned up, notably on motor vehicles and parts. Federal government spending on national defense turned up. And residential housing accelerated, as investment in single-family structures picked up.

Offsetting these contributions to real economic growth, consumer spending on services slowed, and business investment turned down, as spending on equipment and software and on nonresidential structures declined.

Revisions to GDP
The upward revision to real GDP growth in the third quarter of 2012 mainly reflected a large upward revision to private inventory investment, mostly in manufacturing and wholesale trade. In addition, goods exports was revised up, partly reflecting a revision to industrial supplies and materials. In contrast, consumer spending on both goods and services was revised down. Business investment was also revised down, reflecting a revision to equipment and software.

For more information, see the technical note.

Corporate profits
BEA released its preliminary estimate of third-quarter corporate profits. Profits accelerated in the third quarter, rising 3.5 percent at a quarterly rate after rising 1.1 percent in the second quarter.

Profits of financial corporations rose 18.3 percent, while profits of nonfinancial corporations fell 0.1 percent. Profits from the rest of the world decreased 0.6 percent.

For more, here’s the full report.

Personal Income Rose in Most Counties in 2011

Personal income rose in 3,062 of the nation’s 3,113 counties in 2011, with growth ranging from 62.2 percent in King County, TX, to –28.8 percent in Lynn County, TX. Of the 50 counties with the fastest personal income growth in 2011, 45 were located in the Plains Region—with 41 of the 45 counties located in Nebraska, North Dakota, and South Dakota. Increases in farm income were a major factor in the growth rates for most of these counties. Inflation, as measured by the national price index for personal consumption expenditures, accelerated to 2.4 percent in 2011 from 1.9 percent in 2010.

Per capita personal income (personal income divided by population) in counties in 2011 ranged from $121,301 in New York County (Manhattan), NY, to $16,752 in Crowley County, CO. Of the nation’s 3,113 counties, 609 (19.6 percent) had 2011 per capita personal income levels that exceeded the nation’s average of $41,560.

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