Archive for January, 2014

Personal Income Remained Flat in December

pi1Personal income remained flat in December after increasing 0.2 percent in November. Wages and salaries, the largest component of personal income, also remained flat after rising 0.5 percent.

Current-dollar disposable personal income (DPI), after-tax income, remained flat in December after increasing 0.1 percent in November.

Real DPI, income adjusted for taxes and inflation, decreased 0.2 percent in December after increasing 0.1 percent in November.

Real consumer spending, spending adjusted for price changes, increased 0.2 percent in December after increasing 0.6 percent in November. Spending on durable goods decreased in December after increasing in November.

PCE prices increased 0.2 percent in December after remaining flat in November. Excluding food and energy, PCE prices rose 0.1 percent in December.

Personal saving ratepi2
Personal saving as a percent of DPI was 3.9 percent in December and 4.3 percent in November.

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

GDP Growth Slows in Fourth Quarter

Real gross domestic product (GDP) increased 3.2 percent in the fourth quarter of 2013, according to the “advance” estimate released by the Bureau of Economic Analysis (BEA). In the third quarter, the growth rate was 4.1 percent. For the full year 2013, real GDP increased 1.9 percent, compared with 2.8 percent in 2012.gdp1

Fourth-quarter GDP highlights
The slowdown in real GDP growth mainly reflected a slowdown in inventory investment. In fact, GDP less inventory investment (real final sales of domestic product) accelerated, rising 2.8 percent in the fourth quarter, compared with 2.5 percent in the third quarter. Also contributing to the economic slowdown: a larger decrease in federal government spending, a downturn in housing investment, a slowdown in state and local government spending, and a slowdown in business investment.

Offsetting the contributions to the slowdown:
• Net exports accelerated, reflecting a pickup in exports and a slowdown in imports.
• Consumer spending accelerated, reflecting a pickup in spending on household services, notably household utilities as well as food services and accommodations.

Gross domestic purchases prices
Prices of goods and services purchased by U.S. residents rose 1.2 percent in the fourth quarter after rising 1.8 percent in the third quarter. Both energy prices and food prices turned down in the fourth quarter. Excluding these items, prices rose 1.7 percent after rising 1.5 percent.

Government shutdown
The full effects of the federal government shutdown in October could not be quantified. However, BEA was able to estimate the effects of the reduction in hours worked by federal employees, which reduced GDP growth by 0.3 percentage point. More informationgdp2

Annual GDP highlights
The slowdown in real GDP growth in 2013 reflected the following:
• Business investment slowed, reflecting slower growth in both structures (mainly power and communication) and equipment (mainly transportation).
• Federal government spending declined more in 2013 than in 2012.
• Consumer spending on services slowed, rising 1.2 percent after rising 1.6 percent.

In contrast, state and local government spending declined less in 2013 than in 2012, and consumer spending on goods accelerated.

For more on GDP, read the full report.

Widespread Growth Across Industries in 2012

Professional and business services; finance, insurance, real estate, rental, and leasing; mining; and manufacturing were the leading contributors to U.S. economic growth in 2012, according to revised statistics on the breakout of real gross domestic product (GDP) by industry from the Bureau of Economic Analysis.gdp_indy1

• Professional, scientific, and technical services increased 4.2 percent in 2012, primarily reflecting strong growth in computer systems design and related services.

• Mining value added rose 14.0 percent in 2012 after increasing 9.9 percent in 2011, reflecting strong growth for oil and gas extraction.

GDP prices modestly decelerated in 2012, increasing 1.7 percent after increasing 2.0 percent in 2011.gdp_indy2

• Value-added prices for the private goods-producing sector decelerated in 2012, increasing 1.8 percent after increasing 6.0 percent in 2011. Mining was the leading contributor to the deceleration in the GDP price index for 2012.

• Value-added prices for the private services-producing sector increased 2.2 percent in 2012 after increasing 1.2 percent in 2011, reflecting accelerated growth in prices for real estate and rental and leasing.

For more, read the full report.