US Personal Income Rises 0.4% in May
WASHINGTON (MNI) -- The U.S. May personal income is flashing caution and the latest weekly unemployment claims data are steady.
May personal income posted +0.4%, personal consumption expenditures +0.2%, and core PCE prices +0.2% for +1.5% over-the-year in their biggest gain since February 2013.
Real PCE fell 0.1% after -0.2% in April as levels were revised lower. So Q2 consumption growth is running under +2% in a very modest gain that could lower GDP estimates. This suggests a still cautious consumer.
Real spending on durables jumped 1.0% in May, led by autos, which accounted for more than half the increase. Real spending on nondurables and services fell.Private wages advanced $27.8 billion in May after +$17.9 billion in April. Most of the jump was in goods-producing manufacturing payrolls. Wage supplements, proprietors' income, rents, income receipts, and transfers all gained, suggesting a healthy environment, at least for the owners of assets. But savings jumped to more than $620 billion, putting the saving rate at 1.5%, its best since winter 2013. This also had the effect of impeding spending. Annual revisions to the personal income data will be released on in the next report on August 1. In a separate report, initial unemployment claims were down 2,000 to 312,000 in the June 21 week, in a steady state. Claims are in theirfifth week lower, showing the labor market is doing better. There were no special factors, the Labor Department said. Continuing claims rose 12,000 to 2.571 million in the June 14 week, but are down from 2.623 million in mid-May. These have been on a steady decline for the last year, reflecting an improved labor market and the expiration of extended benefit programs.
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