–Private Wages +$18b vs +$23.9b in Feb; Savings Rate 5.5%
By Joseph Plocek
WASHINGTON (MNI) – The March Personal Income report gives little
insight for the future, since its results were already incorporated into
the Q1 GDP estimate.
March Personal Income printed +0.5%, Personal Consumption
Expenditures +0.6% and PCE core prices +0.1% for +0.9% over the year.
Private wages advanced $18 billion after an upwardly revised +$23.9
billion in February. Manufacturing payrolls rose and services wages
gained at about half their February pace. Arguably the most interesting
‘new’ information is that wages continue to grow at a good clip.
Supplements, proprietors’ income, rents, income receipts, and
government transfers all rose, adding to a healthy outlook.
The monthly savings rate was 5.5%, the same as in February. Savings
spiked in January after a blow-out Christmas season and then dipped. The
savings rate appears to have downshifted in late 2010 but remains
elevated from pre-recession numbers.
February wages were revised higher and savings down in perhaps one
interesting pattern that suggests a higher propensity to spend as the
economy improves.
Another interesting pattern is seen in monthly real consumption
numbers. Consumers spent heavily on autos in February but then pulled
back on durables buys in March; they also stopped spending on
nondurables in March (-0.3%) as food and energy prices jumped. Thus,
real spending shows a sawtooth pattern, ending Q1 on a lower note that
implies a lack of momentum into Q2.
Even the Commerce Department statement accompanying the data said
there was “nothing unusual” in the March PCE report.
**Market News International Washington Bureau: (202)371-2121**
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