Personal income in June fell 1.3%, a little more than expected and completely offsets the revised 1.3% gain in May. Spending fared better, rising 0.3% after a revised 0.1% increase in May (originally 0.3%). The PCE core deflator was sopt on expectations, rising 0.2%, but the headline has fallen into a year-over-year decline. The May rate was revised to -0.3% and the June figure came in at -0.4%. This should help temper any near-term inflation fears.
The drop in income was the latest in four years and is largely a reflection of the timing of government transfer programs. In May, Social Security recipients received a one-off $250 check. Without transfers, incomes would have fallen 0.1% and the May figure would have been flat. Wages and salaries fell 0.4% in June, the 10th consecutive decline.
The market impact of this data has been muted by the fact that since Q2 GDP was released last week, this data is seen as old. Consolidative forces have gripped the currency markets and other asset markets today. The data doesn't change that.
The drop in income was the latest in four years and is largely a reflection of the timing of government transfer programs. In May, Social Security recipients received a one-off $250 check. Without transfers, incomes would have fallen 0.1% and the May figure would have been flat. Wages and salaries fell 0.4% in June, the 10th consecutive decline.
The market impact of this data has been muted by the fact that since Q2 GDP was released last week, this data is seen as old. Consolidative forces have gripped the currency markets and other asset markets today. The data doesn't change that.
Income slumps, Spending Posts Modest Rise
![Income slumps, Spending Posts Modest Rise]()
Reviewed by Marc Chandler
on
August 04, 2009
Rating:
