May Personal Income up 0.4%, Spending up 0.1%; 2 Months PCE to Add 184 Basis Points to Q2 GDP
Submitted by rjs on July 3, 2017 - 11:21am
The May report on Personal Income and Outlays, released on Friday by the Bureau of Economic Analysis, gives us nearly half the data that will go into 2nd quarter GDP, since it gives us 2 months of data on our personal consumption expenditures (PCE), which accounts for more than 69% of GDP, and the PCE price index, the inflation gauge the Fed targets, and which is used to adjust that personal spending data for inflation to give us the relative change in the output of goods and services that our spending indicated. This same report also gives us monthly personal income data, disposable personal income, which is income after taxes, and our monthly savings rate. However, because this report feeds in to GDP and other national accounts data, the change reported for each of those are not the current monthly change; rather, they're seasonally adjusted amounts at an annual rate, ie, they tell us how much income and spending would increase for a year if May's adjusted income and spending were extrapolated over an entire year. Nonetheless, the percentage changes are computed monthly, from one month's annualized figure to the next, and in this case of this month's report they give us the percentage change in each annualized metric from April to May.
http://www.economicpopulist.org/content/may-personal-income-04-spending-01-2-months-pce-add-184-basis-points-q2-gdp-6111
