Archive for August, 2013

Personal Income Slows in July

pi1_aug30Personal income increased 0.1 percent in July after increasing 0.3 percent in June. Wages and salaries, the largest component of personal income, decreased 0.3 percent in July after increasing 0.4 percent in June. Government wages were reduced in July due to furloughs.

Current-dollar disposable personal income (DPI), after-tax income, increased 0.2 percent in July, the same increase as in June.

Real DPI, income adjusted for taxes and inflation, increased 0.1 percent in July after falling 0.2 percent in June.

Real consumer spending, spending adjusted for price changes, remained flat in July after increasing 0.2 percent in June. Spending on durable goods slowed.

PCE prices increased 0.1 percent in July after increasing 0.4 percent in June. Excluding food and energy, PCE prices increased 0.1 percent in July, compared to an increase of 0.2 percent in June.

Personal saving rate
Personal saving as a percent of DPI was 4.4 percent in July, the same as in June.

pi2_aug30To learn more about personal income and outlays, read the full report.

GDP Growth Picks Up in Second Quarter

Real gross domestic product (GDP) increased 2.5 percent in the second quarter of 2013 after increasing 1.1 percent in the first quarter, according to the “second” estimate released by the Bureau of Economic Analysis (BEA). The second-quarter growth rate was revised up 0.8 percentage point from the advance estimate released in July.gdp1_aug29

GDP growth highlights
The second-quarter acceleration reflected the following:
• An upturn in goods exports; nonautomotive consumer goods accelerated, and civilian aircraft and parts turned up.
• An upturn in business investment, mainly in power and communication structures.

These contributions to the acceleration in economic growth were offset in part by an acceleration in imports; autos, engines, and parts turned up. In addition, inventory investment and consumer spending slowed.

Revisions
The revision to second-quarter GDP growth reflected:
• An upward revision to exports of goods, mainly nonautomotive capital goods, industrial supplies and materials, and nonautomotive consumer goods.
• A downward revision to imports; nonautomotive consumer goods and petroleum products were the top contributors.
• An upward revision to inventory investment, reflecting upward revisions to inventory investment at auto dealerships and general merchandise stores.

Offsetting these upward revisions to GDP growth, state and local government spending was revised down. For more information about the second-quarter revisions, see the technical note.

Corporate profitsgdp2_aug29
BEA’s featured measure of corporate profits rebounded in the second quarter, increasing 3.9 percent after decreasing 1.3 percent in the first quarter.

• Profits of nonfinancial corporations rose 4.2 percent after falling 0.3 percent.
• Profits of financial corporations increased 3.3 percent after decreasing 0.9 percent.
• Profits from the “rest of the world” rose 3.4 percent after falling 4.7 percent.

Compared with second quarter of 2012, second-quarter corporate profits rose 5.0 percent.

For more on GDP, read the full report.

Economic Activity in Virgin Islands Decreases in 2012 and 2011

The estimates of gross domestic product (GDP) for the U.S. Virgin Islands show that real GDP—adjusted to remove price changes—decreased 13.2 percent in 2012 after decreasing 6.6 percent in 2011.

In contrast, real GDP for the United States (excluding the territories) increased 2.8 percent in 2012 after increasing 1.8 percent in 2011.

The decline in the Virgin Islands economy reflected decreases in exports of goods and territorial government spending.

The decrease in exports of goods, particularly the sharp drop in 2012, reflected the decline of the petroleum refining industry that for many years had played a dominant role in the economy. The Hovensa oil refinery, one of the world’s largest oil refineries, shut down operations on St. Croix in early 2012.

Excluding the imports, exports, and inventory investment of the petroleum refining industry, GDP would have increased 2.6 percent in 2012, primarily reflecting growth in exports of rum.

Territorial government spending contributed to the economic decline in 2011 and in 2012. Government construction activity decreased in both years, with activity in 2012 dropping more steeply than in 2011.

Compensation of government employees also fell in both years, reflecting declines in government employment.

To learn more, read the full report.