2009 Economic Calendar
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Personal Income and Outlays  
Released On 10/30/2009 8:30:00 AM For Sep, 2009
PriorPrior RevisedConsensusConsensus RangeActual
Personal Income - M/M change0.2 %0.0 %-0.2 % to 0.2 %0.0 %
Consumer Spending - M/M change1.3 %-0.5 %-0.8 % to 0.5 %-0.5 %
Core PCE price index - M/M change0.1 %0.1 %
Personal Income - Yr/Yr change-2.6 %-2.7 %-2.8 %
Consumer Spending - Yr/Yr change-0.3 %-0.2 %-0.3 %
Core PCE price index - Yr/Yr change1.3 %1.3 %

The consumer sector softened in September in both income and spending. Personal income in September was unchanged, following a revised 0.1 percent gain in August. The September number matched the market forecast for no change. The wages and salaries component, however, declined 0.2 percent after rising 0.2 percent in August.

With cash-for-clunkers having expired in August, consumer spending in September fell significantly on a plunge in motor vehicle sales. Personal consumption expenditures dropped 0.5 percent after a 1.4 percent surge in August. The September decline was led by durables, which fell a monthly 7.0 percent. Nondurables increased 0.7 percent while services advanced a moderate 0.2 percent.

Inflation was subdued in September. The headline PCE price index eased a little to a 0.1 percent increase, following a 0.3 percent jump in August. Core PCE inflation was steady with a 0.1 percent boost in September which is the pace seen for several months.

The inflation-adjusted spending numbers call into question some of yesterday's excitement about a stronger-than-expected GDP report with relatively strong PCE numbers. The quarter "on average" was healthy, but on the margin, it ended with a whimper. Real PCEs fell 0.5 percent in September, following a 1.4 percent spike in August and a 0.2 percent rise in July.

Year on year, personal income growth for September came in at minus 2.8 percent, down from minus 2.7 percent in August. Year-ago headline PCE inflation was steady at minus 0.5 percent in September. Year-ago core PCE inflation was unchanged at up 1.3 percent.

The bottom line is that the consumer sector weakened in September but in line with expectations. The news itself should have no impact on the markets since expectations were met. But equity futures are down on profit taking and belief that yesterday's run up was a little too much. Markets now will be focusing on the consumer sentiment index coming up shortly this morning.

Consensus Outlook
Personal income in August edged up 0.2 percent after a 0.2 percent increase the month before. Also, the important wages and salaries component also rose 0.2 percent in the latest two months. Consumer spending spiked on cash-for-clunkers auto purchases as personal consumption expenditures surged 1.3 percent in August, following a 0.3 percent rise in July. But spending in other components was generally healthy. Inflation was mixed as the headline PCE price index jumped to 0.3 percent while core PCE inflation was unchanged at 0.1 percent. Looking ahead, at least the wages & salaries component is likely to dip as average weekly earnings slipped 0.2 percent in September. Personal consumption expenditures are likely to be mixed. Overall PCEs are likely to drop in September as unit new motor vehicle sales plunged a monthly 34.6 percent for the month. But retail sales excluding autos rose 0.5 percent, indicating that outside of autos, PCEs should be moderately healthy. For inflation, look for moderately firm numbers as the headline CPI rose 0.2 percent in September as did the core CPI.

Personal income represents the income that households receive from all sources including wages and salaries, fringe benefits such as employer contributions to private pension plans, proprietors' income, income from rent, dividends and interest and transfer payments such as Social Security and unemployment compensation. Personal contributions for social insurance are subtracted from personal income.

Personal consumption expenditures are the major portion of personal outlays, which also include personal interest payments and transfer payments. Personal consumption expenditures are divided into durable goods, nondurable goods and services. These figures are the monthly analogues to the quarterly consumption expenditures in the GDP report, available in nominal and real (inflation-adjusted) dollars. Economic performance is more appropriately measured after the effects of inflation are removed.

Each month, the Bureau of Economic Analysis also compiles the personal consumption expenditure price index, also known as the PCE price index. This inflation index measures a basket of goods and services that is updated annually in contrast to the CPI, which measures a fixed basket.

 Why Investors Care
Changes in taxes or social security cost of living adjustments can cause some sharp variations in monthly disposable income growth. However, on the whole, monthly changes in disposable income fluctuate less than monthly changes in personal consumption expenditures.
Data Source: Haver Analytics
Monthly changes in personal consumption expenditures are usually skewed by large changes in spending on durable goods. Spending on nondurable goods and services tend to be less volatile from one month to the next.
Data Source: Haver Analytics

2009 Release Schedule
Released On: 2/23/23/274/306/16/268/48/2810/110/3011/2512/23
Release For: DecJanFebMarAprMayJunJulAugSepOctNov

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