2011 Economic Calendar
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Personal Income and Outlays  
Released On 9/30/2011 8:30:00 AM For Aug, 2011
PriorConsensusConsensus RangeActual
Personal Income - M/M change0.3 %0.1 %-0.1 % to 0.3 %-0.1 %
Consumer Spending - M/M change0.8 %0.2 %0.1 % to 0.4 %0.2 %
Core PCE price index - M/M change0.2 %0.2 %0.2 % to 0.2 %0.1 %
Personal Income - Yr/Yr change5.3 %
Consumer Spending - Yr/Yr change5.1 %
Core PCE price index - Yr/Yr change1.6 %1.6 %
Personal Outlays - $ level11.074 thous billion $

Growth in personal income not just slowed in August but declined slightly-but it should not have been a surprise. Meanwhile, personal spending posted a moderate gain even after following a surge the month before. Personal income in August slipped 0.1 percent, following a 0.1 percent gain the month before. The dip in August came in lower than analysts' expectation for a 0.1 percent rise.

The wages & salaries component declined 0.2 percent after a 0.3 percent boost in July. The weakness in wages & salaries is consistent with the 0.4 percent drop in private aggregate earnings in the employment situation report. Weakness in wages & salaries was led by privates services but private goods-producing industries also declined in August. The government component posted a modest rise.

Consumer spending rose a modest 0.2 percent in August, following a sharp 0.7 percent surge the prior month. The August figure matched the consensus projection for a 0.2 percent gain. By components, durables edged down 0.1 percent after surging 2.2 percent in July as auto sales leveled. Nondurables advanced 0.3 percent, following a 0.5 percent gain in July. Services rose 0.2 percent after jumping 0.6 percent the month before.

On the inflation front, the headline PCE price index eased to a 0.2 percent rise from 0.4 percent in July. Analysts expected a 0.3 percent gain. The core rate softened to a 0.1 percent uptick, following a 0.2 percent increase in July. The consensus called for a 0.2 percent rise.

Year-on-year, headline prices are up 2.9 percent, compared to 2.8 percent in July. The core is up 1.6 percent on a year-ago basis, matching the pace the month before.

Overall, personal income growth has decelerated with employment growth. Similarly, personal spending has decelerated outside of catch up in auto sales from supply disruptions. The pent up demand factor appears to be losing steam as employment has not made typical cyclical gains and overall economic growth will need another source of strength-possibly exports.

On the news, equities were little changed.

Consensus Outlook
Personal income in July rose a moderately healthy 0.3 percent after rising 0.2 percent in June. Wages & salaries grew a little more robust 0.4 percent, following a bump up of 0.1 percent the month before. Consumer spending rebounded a sharp 0.8 percent after slipping 0.1 percent in June. On the inflation front, the headline PCE price index jumped 0.4 percent, following a 0.1 percent decrease in June. The primary reason was energy costs with food also contributing. The core rate posted a 0.2 percent gain, matching the June pace and equaling expectations. Looking ahead to August numbers, the private wages & salaries component in personal income is likely to be negative as private aggregate earnings fell 0.4 percent. Spending should be sluggish as unit new motor vehicle sales slipped 0.8 percent and retail sales excluding auto edged up only 0.1 percent. PCE price inflation will likely be on the warm side, tracking the August CPI where the headline was up 0.4 percent and core up 0.2 percent.

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
Release For: DecJanFebMarAprMayJunJulAugSepOctNov

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