Personal Income And Spending: Nothing To Impress

by: Karl Denninger

So what do we have here?

Personal income increased $30.9 billion, or 0.2 percent, and disposable personal income (DPI) increased $20.7 billion, or 0.2 percent, in March, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $21.0 billion, or 0.2 percent. In February, personal income increased $151.2 billion, or 1.1 percent, DPI increased $134.0 billion, or 1.1 percent, and PCE increased $81.6 billion, or 0.7 percent, based on revised estimates.

So what's there to cheer about in this report? Nothing.

Private wage and salary disbursements were up $14.9 billion, but that number was $44.6 billion in February. Goods-producing payrolls contracted (barely), which isn't good at all. Service payrolls were up half of last month's figure.

Proprietors didn't do any better, basically cut in half from last month's increase. Rental income was up about the same amount but interest and dividend income went negative compared with last month's healthy increase. On the other hand, February was a bounce resulting from the pull-forward in December, so exactly how much of that is the "bounce along" effect is at this point difficult to determine.

Tax payments for social insurance (a good indirect measure of employment) however, increased at about one-third of last month's value. Not so good.

The "savings" rate was unchanged from last month at 2.7%. Remember that paying down debt, in the government statistical view, is "saving."

Prices were flat; energy was down a bit, core was up a bit. Net-net the change was about -0.1% and core was under +0.1%. Call it a push.

There's nothing in here that impresses me in either direction with one exception -- this data supports the March payroll report and the trends since do not portend a meaningful improvement in April.

We'll see at the end of the week.