US Personal Income Mar: 21.1% (est 20.2%; prevR -7.0%; prev -7.1%); US Personal Spending Mar: 4.2% (est 4.1%; prev -1.0%) - details and analysis


  • US Personal Income Mar: 21.1% (est 20.2%; prevR -7.0%; prev -7.1%)
  • US Personal Spending Mar: 4.2% (est 4.1%; prev -1.0%)
  • US Real Personal Spending Mar: 3.6% (est 3.7%; prev -1.2%)
  • US PCE Deflator (M/M) Mar: 0.5% (est 0.5%; prev 0.2%)
  • US PCE Deflator (Y/Y) Mar: 2.3% (est 2.3%; prev 1.6%)
  • US PCE Core Deflator (M/M) Mar: 0.4% (est 0.3%; prev 0.1%)
  • US PCE Core Deflator (Y/Y) Mar: 1.8% (est 1.8%; prev 1.4%)

As anticipated last month, March personal income comes in with a massive number. The big question was how much of it got spent, and it looks like about what was expected leading to a huge savings rate. I'll go through each piece independently, but overall a very bullish report. Table at the end.

Personal Income



Fueled by the second round of stimulus payments and increased benefits, income ripped up over 20% m/m.   Wages and salaries did increase also, up 1%, and proprietor's income was up a very solid 6.2% so wasn't all just government benefits.  But those were up 95% so clearly that drove things.  

With respect to that 1% wage increase m/m Pantheon Macro says that's something the Fed will be keeping an eye on.


Consumer Spending




After February's decline, strong month in personal spending fueled by that personal income increase.  Goods were up 8.5% led by durables (up 10.8%) with services up a more moderate 2.2%. 

For detail on personal spending, the report does a good job of breaking that down:
Within goods, both nondurable (led by “other” nondurable goods, which includes recreational items like games, toys, and hobbies) and durable goods (led by motor vehicles and parts) contributed to the increase. Within services, the largest contributor to the increase was spending for food services and accommodations.
Personal Savings

As noted while we did get a tickup in spending nothing close to income increase so savings rate also soared to 27.6% improving household balance sheets and providing more fuel for future spending.



Prices

On prices, goods were up 0.7% with durables up half percent and non-durables up eight tenths m/m. Services were up eighth tenths as well.  Food was up two tenths and energy was up 4.9%(!) m/m.

Table of m/m income and spending:


Prices





To see more content, including my Daily Summary and summaries of some of today's economic reports go to 

https://sethiassociates.blogspot.com






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