2018 Economic Calendar
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Personal Income and Outlays  
Released On 8/30/2018 8:30:00 AM For Jul, 2018
PriorConsensusConsensus RangeActual
Personal Income - M/M change0.4 %0.3 %0.3 % to 0.4 %0.3 %
Consumer Spending - M/M change0.4 %0.4 %0.1 % to 0.5 %0.4 %
PCE Price Index M/M change0.1 %0.2 %0.1 % to 0.3 %0.1 %
Core PCE price index - M/M change0.1 %0.2 %0.1 % to 0.3 %0.2 %
PCE Price Index Y/Y change2.2 %2.3 %2.3 % to 2.4 %2.3 %
Core PCE price index - Yr/Yr change1.9 %2.0 %1.9 % to 2.1 %2.0 %

Highlights
The July personal income & outlays report is about exactly what the Federal Reserve is looking for: moderation to still solid levels of income and spending growth and steady readings on inflation that are right on target.

Personal income rose 0.3 percent while consumer spending rose 0.4 percent, both hitting Econoday's July consensus. The PCE price index managed only a 0.1 percent gain which falls 1 tenth short of the consensus but the more closely watched core rate rose 0.2 percent to hit the consensus. The year-on-year rate for the core also hits the consensus, up 1 tenth to 2.0 percent which is exactly the Fed's target.

Details on income are favorable with wages & salaries rising 1 tenth more than the headline, up 0.4 percent. Proprietor income and personal interest income both slowed in the month to pull down the total. The savings rate is neutral in today's report, down 1 tenth to what is still a very strong 6.7 percent.

Spending data in July were held back for a second month by durable goods which reflects softness in vehicle sales. Service spending rose a solid 0.4 percent though down 2 tenths from June.

One soft detail in the report is a 1 tenth slowing in real disposable income, up only 0.2 percent in July. Weakness here will definitely limit the strength of consumer spending which for right now, however, is right where the Fed wants it.

Consensus Outlook
Personal income is seen rising a moderate 0.3 percent in July while consumer spending is expected to increase a solid 0.4 percent. The core PCE price index, which excludes both food and energy, is seen posting a modest 0.2 percent monthly rise for a year-on-year on-target gain of 2.0 percent. This year-on-year rate, which is the most closely watched of all inflation readings, first hit the Fed's 2 percent goal in March before edging to 1.9 percent in subsequent reports. The consensus for the overall PCE price index is also 0.2 percent for a year-on-year rate of 2.3 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 sharp variations in monthly disposable income. But monthly changes in disposable income generally 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
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