Highlights
Fundamentals for the consumer sector improved in part in November despite high unemployment. Personal income was up-including for the critical wages & salaries component. Personal income in November posted a gain of 0.4 percent, following a rise of 0.3 percent the month before. The consensus had forecast an increase of 0.5 percent for overall personal income. The important wages and salaries component advanced 0.3 percent after a 0.1 percent increase in October.

Keeping in line with earlier reported gains in retail sales and motor vehicles sales, personal consumption jumped a healthy 0.5 percent, following a 0.6 percent increase in October. The November number fell just short of the market projection for a 0.6 percent surge in PCEs. The boost in November was led by nondurables, which jumped 1.5 percent after a 0.3 percent gain in October. Durables in November rose 1.1 percent while services were unchanged.

Inflation eased in November. Headline PCE price inflation slowed to 0.2 percent from 0.3 percent in October. In contrast, core PCE inflation eased to no change in November from up 0.2 percent the prior month. The consensus had forecast a 0.1 percent core increase.

Year on year, personal income growth for November came in at minus 0.3 percent, improved from minus 1.0 percent in October. Year-ago headline PCE inflation increased to plus 1.5 percent from plus 0.1 percent in October. Year-ago core PCE inflation was unchanged at up 1.4 percent in November.

Today's report is very close to expectations for key series and normally would have little impact on most markets. But trading is thin and traders could focus on any given highlight-meaning anything could happen even though there should be little impact. On the release, however, Treasury yields eased incrementally, apparently liking the marginally better-than-expected inflation numbers.

Market Consensus Before Announcement
Personal income in October edged up 0.2 percent, matching a 0.2 percent rise in September. The important wages and salaries component, however, was flat after a 0.1 percent dip in September. Personal consumption expenditures jumped 0.7 percent after a 0.6 percent drop in September. The rebound reflected a comeback in auto sales after the post-clunkers drop off in September. Headline PCE price inflation rose to 0.3 percent from a 0.1 percent rise in September. Core PCE inflation edged up to 0.2 percent in October from 0.1 percent the month before. Looking ahead, we should get some improvement in personal income-or rather at least in wages & salaries as aggregate payroll earnings rebounded 0.7 percent in November. PCEs growth should be healthy as retails sales excluding autos were up 1.2 percent for November and unit new motor vehicles sales advanced 4.5 percent. PCE inflation numbers should be mixed, closely tracking November's CPI headline and core inflation numbers of up 0.4 percent and flat, respectively.

2009 Release Schedule

Released On: 2/2 3/2 3/27 4/30 6/1 6/26 8/4 8/28 10/1 10/30 11/25 12/23 Released For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov