Monday, November 2, 2009

Person Income And Spending

Last Friday the BEA released the personal income and expenditure report. Here's the main information in the report:

Personal income decreased $0.1 billion, or less than 0.1 percent, and disposable personal income (DPI) decreased $0.2 billion, or less than 0.1 percent, in September, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $47.2 billion, or 0.5 percent. In August, personal income increased $17.4 billion, or 0.1 percent, DPI increased $14.1 billion, or 0.1 percent, and PCE increased $139.8 billion, or 1.4 percent, based on revised estimates.

Let's break the information down into sub-categories. Click on all images for a larger image.

Note that wage and salaries appear to be bottoming. They have been printing in a smaller range for the last four months. In addition, government transfer payments are more or less holding steady at current levels. My guess is this is the result of increased unemployment/personal assistance payments.

Regarding the actual expenditures, first consider that services account for 66% of all purchased, non-durable purchases account for 22% and durables account for 12%. That being said:

Service purchases have been increasing since May.

Non-durable purchases were decreasing until July but have risen strongly the last two months. Remember -- these aren't durable (as in cash for clunkers).

Here we see the impact of cash for clunkers -- a big spike followed by a fall.

But also notice that we have other areas of spending increasing.