Personal income increased 0.5 percent in March after increasing 0.4 percent in February. Wages and salaries, the largest component of personal income, increased 0.6 percent after increasing 0.3 percent.
Current-dollar disposable personal income (DPI), after-tax income, increased 0.5 percent in March after increasing 0.4 percent in February.
Real DPI, income adjusted for taxes and inflation, increased 0.3 percent in March, the same increase as in February.
Real consumer spending, spending adjusted for price changes, increased 0.7 percent in March after increasing 0.4 percent in February. Spending on durable goods increased 2.7 percent after increasing 1.3 percent. Purchases of motor vehicles and parts accounted for more than half of the March increase.
PCE prices increased 0.2 percent in March after increasing 0.1 percent in February. Excluding food and energy, PCE prices rose 0.2 percent in March.
Personal saving rate
Personal saving as a percent of DPI was 3.8 percent in March and 4.2 percent in February.
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Real gross domestic product (GDP) increased 0.1 percent in the first quarter of 2014, according to the “advance” estimate released today by the Bureau of Economic Analysis. In the fourth quarter of 2013, the growth rate was 2.6 percent.
First-quarter GDP highlights
The slowdown in real GDP growth reflected:
- A downturn in exports. Exports of industrial supplies and materials as well as foods, feeds, and beverages declined after increasing in the fourth quarter.
- A downturn in business investment. Spending on transportation equipment fell after rising significantly in the fourth quarter. Spending on computers and peripherals also turned down.
- A larger decrease in inventory investment. Inventory investment by retail trade companies (mainly motor vehicles dealers) declined significantly after an increase in the fourth quarter.
- A slowdown in consumer spending, mainly in nondurable goods, notably clothing and footwear as well as food and beverages. These movements were partly offset by faster growth in utilities and healthcare.
In contrast, federal government spending turned up, and imports declined after increasing in the fourth quarter.
Personal income and personal saving
Real disposable personal income (DPI)–personal income adjusted for inflation and taxes–increased 1.9 percent in the first quarter, compared with 0.8 percent in the fourth quarter of 2013. Personal saving as a percent of current -dollar DPI was 4.1 percent, compared with 4.3 percent.
Prices of goods and services bought by U.S. residents rose 1.4 percent in the first quarter, after rising 1.5 percent in the fourth quarter of 2013.
Both energy prices and food prices turned up.
Excluding food and energy, prices increased 1.4 percent in the first quarter after rising 1.8 percent in the fourth quarter.
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Today, the U.S. Bureau of Economic Analysis released real, price-adjusted estimates of personal income for states and metropolitan areas for 2008-2012. The price-adjustments are based on regional price parities (RPPs) and on BEA’s national Personal Consumption Expenditure (PCE) price index. The RPPs measure geographic differences in the price levels of consumption goods and services relative to the national average, and the PCE price index measures national price changes over time. Using the RPPs in combination with the PCE price index allows for comparisons of the purchasing power of personal income across regions and over time. These estimates are being released for the first time as official statistics.*
Growth in real metropolitan area personal income from 2011 to 2012 ranged from a decline of 3.8% in Kennewick-Richland, WA to an increase of 10.2% in Odessa, TX. After Odessa, TX, the metropolitan areas with largest growth rates of real personal income were Midland, TX (9.6%), Greenville, NC (9.0%), Jackson, TN (8.1%), and Columbus, IN (7.6%). After Kennewick-Richland, WA, the metropolitan areas with the largest declines were Watertown-Fort Drum, NY (-2.5%), State College, PA (-2.4%), Hanford-Corcoran, CA (-2.3%), and Sierra Vista-Douglas, AZ (-1.7%).
* Prototype statistics were released for evaluation and comment by users on June 12, 2013.
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