Monday, December 28, 2015

Personal Income Growth Strengthens in November

Total personal income in the U.S. increased in November by 0.3% on a nominal basis. Strong growth in employment and an increase in the number of hours worked supported an increase of 0.5% in total wages and salaries, which make up just over half of total personal income in the U.S.

Real disposable income (adjusted for taxes and inflation) rose by 0.2%. Real personal consumption expenditures, on the other hand, rose at a slightly faster rate – 0.3%. Accordingly, the personal saving rate dipped to 5.5% in November from 5.6% in October. Real spending on durable goods was up by 1.1% over the month, while spending on nondurable goods rose by 0.9%. Spending on services, which comprise 65% of consumer spending, was flat for the second month in a row.

On a year-to-year basis, incomes and spending moved higher in November:

  • Real disposable income rose by 3.5% in November, slowing slightly from the October rate of 3.8%.
  • Real personal consumption expenditures grew by 2.5%
  • Growth in real spending on goods (3.6%) outpaced spending on services (2.0%) although in dollar terms, Americans spend more than two times as much on services as they do goods.

Consumer prices were unchanged over the month in November but edged up over the year by 0.4%. Excluding food and energy, prices advanced by 1.3%.

In addition to the national figures on personal income, the BEA also released a report on state personal income for the third quarter of 2015. In California, personal income increased by 1.4% compared with the second quarter of this year, slightly ahead of the national average of 1.3%. Personal income grew the fastest in Nebraska and South Dakota (both at 2.2%), while Alaska posted the slowest rate of growth at 0.6%. California ranked 14th in terms of percent growth over the quarter. Compared with the third quarter of 2014, personal income in California increased by 6.5% versus 4.6% for the nation as a whole. 

Source:  http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm and http://www.bea.gov/newsreleases/regional/gdp_state/qgsp_newsrelease.htm

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