Economy

Personal Income Gains Slow in July, Consumer Spending and Saving Remain Strong

Gains in Workers’ Wages and Compensation Offset By Losses for Interest Earners

The Bureau of Economic Analysis (BEA) reported personal income gains slowed to 0.1% in July, below the consensus forecast. Wages and salaries, the largest component of personal income, rose 0.2% in July after gaining 0.5% in June.

	Prior	Revised	Consensus Forecast	Forecast Range	Actual
Personal Income – M/M ∆	0.4%	0.5%	0.3%	0.1% to 0.4%	0.1%
Consumer Spending – M/M ∆	0.3%		0.5%	0.3% to 0.6%	0.6%
PCE Price Index M/M ∆	0.1%		0.2%	0.2% to 0.3%	0.2%
Core PCE Price Index – M/M ∆	0.2%		0.2%	0.1% to 0.3%	0.2%
PCE Price Index Y/Y ∆	1.4%	1.3%	1.5%	1.4% to 1.5%	1.4%
Core PCE Price Index – Yr/Yr ∆	1.6%		1.7%	1.6% to 1.7%	1.6%

Personal income rose 0.4% in both June and May. Wages and salaries gained 0.2% in May.

Worth noting, the slowing in the increase in personal income for July was driven by decreases in personal interest income offsetting increases in compensation of employees and government social benefits.

Put plainly, more wealthy interest earners offset rises in workers wages and benefits.

Disposable personal income (DPI) rose by $44.4 billion (0.3%) and personal consumption expenditures (PCE) gained $93.1 billion (0.6%). Real DPI rose 0.1% in July and Real PCE gained 0.4%.

The PCE price index increased by 0.2%. Excluding food and energy, the PCE price index increased 0.2%.

Personal outlays rose $96.4 billion.

Personal saving came in at $1.27 trillion in July and the personal saving rate — which is personal saving as a percentage of disposable personal income — was still a solid 7.7%.

Americans are spending and saving.

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PPD Business Staff

PPD Business, the economy-reporting arm of People's Pundit Daily, is "making sense of current events." We are a no-holds barred, news reporting pundit of, by, and for the people.