–Private Wages +$27.3b vs +$20.6b in Mar; Savings Rate 4.9%
By Joseph Plocek
WASHINGTON (MNI) – The U.S. April Personal Income report printed
slower spending than expected, suggesting Q2 real growth is off to a
very modest start.
April Personal Income posted +0.4%, Personal Consumption
Expenditures +0.4% (about 0.1 lower than private economists expected)
and PCE core prices +0.2% for +1.0% over the year. Unrounded core PCE
prices were +0.1847%.
Real PCE eked out +0.1%, a very poor beginning to Q2 that could cut
real consumption into the 1%+ area, from the already slow +2.2% posted
in Q1.
Private wages & salaries printed +$27.3 billion after an
upward-revised +$20.6 billion in March as services payrolls jumped.
Supplements, proprietors’ income, rents, income receipts (which had
fallen in March), and government transfers all advanced.
This shows the problem is not in income, which is gaining, but
rather in inflation’s effects. Real spending dropped in March on goods
and “rebounded” to flat in April. Services spending posted just +0.1% in
April.
With lower oil prices, there is a chance May spending will
improve.
The savings rate was 4.9% in April, the same as in March, but a low
since late 2008. Personal savings totaled $570.6 billion, the lowest
since August 2009, so higher prices also forced the consumer to spend
more to stay even, and to save less.
**Market News International Washington Bureau: (202)371-2121**
[TOPICS: MAUDS$,M$U$$$,MT$$$$,MAUDR$]