2014 Economic Calendar
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Personal Income and Outlays  
Released On 6/26/2014 8:30:00 AM For May, 2014
PriorPrior RevisedConsensusConsensus RangeActual
Personal Income - M/M change0.3 %0.4 %0.2 % to 0.5 %0.4 %
Consumer Spending - M/M change-0.1 %0.0 %0.4 %0.3 % to 0.6 %0.2 %
PCE Price Index -- M/M change0.2 %0.3 %0.2 % to 0.3 %0.2 %
Core PCE price index - M/M change0.2 %0.2 %0.1 % to 0.2 %0.2 %
PCE Price Index -- Y/Y change1.6 %1.8 %
Core PCE price index - Yr/Yr change1.4 %1.5 %

Highlights
Personal income for May came in moderately healthy but spending was sluggish. Inflation remained below Fed goal but moved closer.

Personal income rose 0.4 percent in May, following a 0.3 percent advance the month before. Expectations were for a 0.4 percent boost. The important wages & salaries component increased 0.4 percent after a 0.3 percent gain in April.

Personal consumption posted a sluggish 0.2 percent rise in May versus no change the month before. Analysts forecast 0.4 percent for May. For May, sluggishness was in services which edged up only 0.1 percent after a 0.1 percent rise in April. Durables-reflecting auto sales-rebounded 0.7 percent, following a 0.9 percent drop in April. Nondurables rose a soft 0.2 percent after a 0.4 percent boost in April.

PCE inflation came in at a monthly 0.2 percent for both May and April and coming in a little below expectations of 0.3 percent. Core PCE inflation monthly numbers were the same as headline for May and April and matched expectations.

On a year ago basis, headline inflation was 1.8 percent in May versus 1.6 percent the month before. Core inflation on a year-ago basis firmed to 1.5 percent from 1.4 percent in April.

Today's report was mixed. Income looks good while spending is sluggish. Economists likely will be shaving their forecast for second quarter GDP. Also, inflation is moving closer to the Fed's goal of 2 percent year-on-year. Hawks likely will start talking about moving up when the first fed funds rate hike should be. But Fed doves will point to soft spending. Taper scheduling likely will be unchanged to keep markets settled.

Recent History Of This Indicator
Personal income rose 0.3 percent in April but followed a robust 0.5 percent boost the month before. The key wages & salaries component followed a similar pattern, softening to 0.2 percent from a 0.6 percent jump in March. Personal spending dipped 0.1 percent after a 1.0 percent spike in March. Spending on durables, reflecting a pause in auto sales, fell 0.5 percent versus gains of 3.6 and 1.3 percent in the prior two months. Spending on services, however, also fell, down 0.2 percent on a decline in utilities and healthcare after a 0.5 percent rise in March. In real terms, spending fell 0.3 percent following the prior month's 0.8 percent surge. Price data remain muted, up 0.2 percent overall and up 0.2 percent ex-food and energy. Year-on-year price rates are at plus 1.6 percent and 1.4 percent for the core. While PCE price inflation is still below the Fed goal of 2 percent, it has been firming in recent months.

Definition
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
 
[Chart]
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
 
[Chart]
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
 
 

2014 Release Schedule
Released On: 1/313/33/285/15/306/268/18/299/2910/3111/2612/23
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