2011 Economic Calendar
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Personal Income and Outlays  
Released On 8/2/2011 8:30:00 AM For Jun, 2011
PriorPrior RevisedConsensusConsensus RangeActual
Personal Income - M/M change0.3 %0.2 %-0.2 % to 0.4 %0.1 %
Consumer Spending - M/M change0.0 %0.1 %-0.1 % to 0.2 %-0.2 %
Core PCE price index - M/M change0.3 %0.2 %0.2 %0.1 % to 0.2 %0.1 %
Personal Income - Yr/Yr change4.2 %5.0 %5.0 %
Consumer Spending - Yr/Yr change4.7 %4.6 %4.4 %
Core PCE price index - Yr/Yr change1.2 %1.3 %1.3 %
Personal Outlays - $ level11.145 thous billion $

In June, both income and spending were soft, reflecting slow job growth, a decline in motor vehicle sales, and a decrease in gasoline prices. Inflation news is mixed but more favorable. Personal income in June edged up 0.1 percent, easing from a 0.2 percent rise in May. The market median called for a 0.2 percent rise for the latest month. Wages & salaries were unchanged, following a gain of 0.2 percent the prior month.

On a more favorable note, real disposable personal income increased 0.3 percent in June, compared to no change in May as both inflation was negative and taxes dipped in the latest month.

Consumer spending declined 0.2 percent rise after posting a 0.1 percent uptick in May. The latest personal spending expenditure figure matched analysts' projection for a 0.1 percent rise. By components, durables dropped 0.4 percent after falling 1.3 percent in May. Nondurables dropped 0.6 percent, following a 0.3 percent dip the month before. Services were flat, following a 0.4 percent jump in May. Discounting inflation, overall PCEs were unchanged in June, following a 0.1 percent slip in May.

On the inflation front, the headline PCE price index declined 0.2 percent on lower energy costs, after increasing 0.2 percent the month before. The core rate rose but eased to 0.1 percent from 0.2 percent in May.

Year-on-year, headline prices are up 2.6 percent-the same as in May. The core is up 1.3 percent on a year-ago basis, matching May's pace.

Today's report is not does not paint a rosy picture for the consumer sector. But it is not as bad as the headline numbers given the gain in real disposable income and the (hopefully) transitory effects on durables spending (motor vehicle parts shortages).

On the news, equity futures nudged up.

Consensus Outlook
Personal income in May rose 0.3 percent, matching the gain the month before. However, wages & salaries increased a modest 0.2 percent, following a rise of 0.4 percent in April. Personal spending weakened in May, posting at no change, following a 0.3 percent boost the prior month. The slowdown was largely due to a decline in motor vehicle sales as durables dropped 1.5 percent, a drop related to shortages of autos dependent upon Japanese parts. On the inflation front, the PCE price index eased to a 0.2 percent rise from 0.3 percent in April. However, the core rate edged up to 0.3 percent from 0.2 percent in April.

Looking ahead, the private wages & salaries component for June is likely to be soft as aggregate weekly earnings dipped 0.3 percent. PCEs will likely be negative for goods components as retail sales ex autos were flat and unit new motor vehicle sales declined. PCE inflation should be mixed as the headline CPI fell 0.2 percent in June while the core CPI rose 0.3 percent.

This personal income report incorporates standard annual revisions to the National Income and Product Accounts, generally going back three years but sometimes more.

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

2011 Release Schedule
Released On: 1/312/283/284/295/276/278/28/299/3010/2811/2312/23
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