2018 Economic Calendar
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Personal Income and Outlays  
Released On 6/29/2018 8:30:00 AM For May, 2018
PriorPrior RevisedConsensusConsensus RangeActual
Personal Income - M/M change0.3 %0.2 %0.4 %0.3 % to 0.5 %0.4 %
Consumer Spending - M/M change0.6 %0.5 %0.4 %0.3 % to 0.5 %0.2 %
PCE Price Index M/M change0.2 %0.2 %0.2 % to 0.3 %0.2 %
Core PCE price index - M/M change0.2 %0.2 %0.2 % to 0.3 %0.2 %
PCE Price Index Y/Y change2.0 %2.2 %2.2 % to 2.3 %2.3 %
Core PCE price index - Yr/Yr change1.8 %1.9 %1.9 % to 2.0 %2.0 %

Highlights
Personal income and outlays is usually an easy report to forecast, but not May's edition. The most important surprise is the core PCE price index which rose 0.2 percent on the month, which hits expectations, but jumped 2 tenths on the year to 2.0 percent. This hits the high end of Econoday's consensus range and also hits the Federal Reserve price target -- inflation is now where the Fed wants it and this means less need to stimulate the economy.

Spending is the other surprise, rising only 0.2 percent in the month which is below low-end expectations and is not consistent with the FOMC's verdict at mid-month that consumer spending was "picking up." The unwelcome surprise here is in service spending which rose only 0.1 percent vs a 0.6 percent rise in nondurables, here reflecting price strength in energy, and only a 0.1 percent rise for durable goods. This latter reading isn't what was expected following strength in the previously reported retail sales report for May. These results point to a knock down for second-quarter GDP estimates, making outside calls for a 5 percent quarter history.

Income is respectable in the report, up 0.4 percent as expected and including a second straight moderate rise of 0.3 percent in the wages & salaries component. Good news comes from the savings rate which rose 2 tenths to 3.2 percent and offers some explanation for the weakness in spending.

Turning back to inflation, the overall price index also rose 0.2 percent like the core but this year-on-year rate, reflecting high energy prices, is up 3 tenths and is over target at 2.3 percent.

This report marks a pivot for the Fed which now, as it has been signaling, will begin focusing on the upside of its "symmetric" inflation goal, that is protecting against an unwanted acceleration in prices. And that means, soft consumer spending or not, rate hikes to come.

Consensus Outlook
Personal income is seen rising a moderate to solid 0.4 percent in May while consumer spending, in what will be the second major input into second-quarter GDP, is expected to also increase 0.4 percent. The core PCE price index, which excludes both food and energy and which is the most closely watched of all inflation readings, is seen posting a modest 0.2 percent monthly rise for a year-on-year gain of 1.9 percent and very close to the Fed's target for 2 percent. The consensus for the overall price index is also 0.2 percent for a year-on-year rate of 2.2 percent.

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
 
 

2018 Release Schedule
Released On: 1/293/13/294/305/316/297/318/309/2810/2911/2912/21
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


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