Latest Updates

• US Personal Income and Outlays: June 2025 2025-07-31 08:30

  The June personal income and outlays report highlighted a concerning dynamic for policymakers: soft income and spending growth paired with firmer-than-expected inflation. Personal income rose just 0.3% MoM while personal consumption also increased 0.3% MoM, below expectations. Yet, both headline and core PCE inflation accelerated to 0.3% MoM, driven by a broad pickup in goods prices, likely reflecting early impacts from new tariffs. The data reinforces the Fed’s cautious stance, with short-term inflation gauges suggesting the disinflationary momentum of early 2025 has faded.

  Income and Spending

  

  Income continued to show a trend of gradual moderation in the final month of the second quarter after a bit of volatility in April and May. In June, personal income increased just 0.3% MoM, the weakest monthly increase since November 2024 when excluding the previous two months (which were impacted due to volatility in transfer receipts). Notably, this month saw just a 0.2% MoM increase in employee compensation with wages & salaries up just 0.1% MoM. This was the weakest MoM gain in compensation since a year ago, when the Fed judged their to be a noticeable uptick in labor market looseness.

  

  While there was weakness in compensation growth, disposable income growth was also 0.3% MoM as personal transfer receipts increased 1.0% MoM and personal taxes only increased 0.3% MoM (lowest increase since April 2024). An even more troubling view on income can be created by excluding personal transfer receipts and adjusting for inflation. That measure was down -0.2% MoM in June, matching the decline of -0.2% MoM in May. When looking at Q2 as a whole, real personal income (ex-current transfer receipts) was down -0.2% QoQ, the weakest since a -0.4% QoQ drop in Q2 2022.

  

  Tame income growth appears to have tempered the gain in personal consumption expenditures. After no change in May, personal spending was up just 0.3% MoM, falling short of an expected 0.4% MoM increase. Spending growth across goods and services was pretty similar with the former up 0.5% MoM and the latter up 0.3% MoM. The breakdown of spending shows that the largest increases in spending were in health care, housing, and energy goods. Discretionary categories like furnishings, recreational goods & services, and food services & accommodations all saw no growth to a small decline. A drop in spending on vehicles in June also weighed on spending. What is more troubling is that even though personal consumption growth was relatively tame, the weakness in personal income growth led to a -$8.5 billion decline in personal savings.

  PCE Inflation

  

  Even though spending and income growth rates were subdued in June, the PCE price indexes posted their largest monthly gains since February. The headline PCE index increased 0.3% MoM and 2.6% YoY in June, with the monthly rate in line with forecasts and the latter slightly ahead of the 2.5% YoY expected gain. A bounce back in energy was the main reason for the acceleration in the headline annual rate with that subindex up 0.9% MoM. Food prices were also up a decent clip, rising 0.3% MoM. With PCE inflation back up to 2.6% YoY, the disinflation over the last three months from weaker energy prices has basically vanished.

  

  The Fed’s preferred inflation measure, core PCE inflation, was 0.3% MoM and 2.8% YoY in June. Like the headline index, the monthly rate was in line with expectations, while the annual rate beat by 0.1 ppts. Driving core PCE prices higher was a 0.4% MoM increase in the goods segment, the largest since January of this year, reflecting the rise in goods inflation seen in the June CPI report. The goods rise was pretty even across durable (+0.5% MoM) and nondurables (+0.4% MoM), but the durable move was the second largest since September 2022. It’s hard not to see tariffs in this move, especially when spending growth on durables was nonexistent. In Q2 as a whole, durable goods prices increased 1.0% QoQ, the largest quarterly increase since Q1 2022. Outside of goods, the PCE services segment was up 0.2% MoM for the fourth straight month, not playing much of a major role in the overall core PCE index change.

  Source
• US Personal Income and Outlays: May 2025 2025-06-27 08:30

  The latest personal income and spending data for May delivered a downside surprise, adding to concerns raised by the downward revision to Q1 GDP growth just a day earlier. At first glance, the report looks soft, with both income and consumption missing expectations. However, a closer look reveals that much of the weakness stems from temporary volatility in key components like government transfers and proprietors’ income. Meanwhile, PCE inflation figures came in slightly firmer than forecast, reinforcing the Fed’s cautious stance as it awaits more clarity on the inflation path.

  Income and Spending

  

  Income and spending data for May came in notably weak, compounding the pain felt from the downward revision to GDP growth in the final estimate released yesterday. Today’s personal income and outlays report reveals that personal income fell -0.4% MoM in May, slowing significantly from the 0.7% MoM increase in April and coming in well below the forecast of a slight 0.3% MoM gain. The drop in disposable income was slightly worse at -0.6% MoM, the worst drop since January 2022. These headline figures look quite soft, but the underlying data suggests they can be attributed to month-to-month volatility.

  There was a large decline in personal current transfer receipts in May of -$110.4 billion, and more specifically, in Social Security benefits distributed, down -$122.4 billion, after that segment perked up in April, up $107.6 billion. The volatility in this segment more than offset the gains in employee compensation which were stable at 0.4% MoM across both April and May. Another segment that caused the downside surprise was a decrease in proprietors’ income, down -2.3% MoM in May after growth of 1.6% MoM in March and 1.2% MoM in April.

  Alongside weak income data, we see a weak personal consumption expenditures (PCE) print that reflected the drop in retail sales earlier this month. PCE fell -0.1% MoM in May, the second monthly decline so far this year (first was in January) and below expectations of a slight 0.1% MoM gain. The drop was driven by goods spending down -0.8% MoM, especially durable goods spending which was down -1.8% MoM, while services spending was positive but the slowest since November 2020 at 0.1% MoM. The trend in goods spending is consistent with the retail sales blip that was caused by consumers front-running tariffs.

  PCE Inflation

  The Fed has been in the spotlight ever since it decided to keep rates unchanged following its June FOMC meeting as Fed Governors Waller and Bowman came out shortly after with dovish remarks and President Trump launched attacks on Chair Powell. This week, the focus on the Fed came in the form of Powell’s presentation of the Semiannual Monetary Policy Report in front of Congress. To close the week, we get the May update of the Fed’s preferred inflation gauge.

  Headline PCE inflation for May was reported at 0.1% MoM and 2.3% YoY, slightly higher than the 2.2% YoY annual rate reported in April and in line with expectations. Core PCE inflation, the metric watched by the Fed, came in slightly ahead of expectations at 0.2% MoM (vs 0.1% MoM expected) and 2.7% YoY (vs 2.6% YoY expected). Ignoring analyst projections, inflation was pretty calm across all subsegments. Goods prices were up just 0.1% MoM, and services prices were up 0.2% MoM (rounded up from 0.17% MoM). Food prices increased 0.2% MoM, and energy prices fell for the 2nd time in three months, down -1.0% MoM.

  

  While annual core PCE inflation did accelerate slightly, short term inflation pressure is now trending at the Fed’s target. The annualized rate of the quarterly change in core PCE inflation is at 1.7% with goods prices in deflation and services prices just above target at 2.1% using the same measure. This data is now the same or slightly softer than the data that the Fed was dealing with when it chose to cut rates by 50 bps in September 2024. It is safe to say that inflation data over the last three months would contribute to a case for a rate cut.

  Source
• US Personal Income and Outlays: April 2025 2025-05-30 08:30
  

  Personal income increased 0.8% MoM in April, well above expectations of a 0.3% MoM gain. Real disposable income growth was a strong 0.7% MoM.

  • Despite strong income growth, PCE increased just 0.2% MoM, in line with expectations, as goods spending fell -0.1% MoM and services spending increased 0.4% MoM.
  • Services spending increased $55.8 billion, led by spending in housing & utilities (+$24.7 bil) and health care (+$20.3 bil), offsetting an $8.0 billion decline in goods spending.
  • The personal saving rate rose 0.6 ppts to 4.9%, with total savings at $1.12 trillion.
  • The PCE Price Index was up just 0.1% MoM and 2.1% YoY in April, slowing from 2.3% YoY in March and below expectations of a 2.2% YoY increase.
  • Core PCE inflation slowed to 2.5% YoY in April, down from 2.7% YoY in March and the lowest since March 2021.

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• US Personal Income and Outlays: March 2025 2025-04-30 10:00
  

  US personal income increased 0.5% MoM, and personal consumption expenditures increased 0.7% MoM in March. Both were above expectations of 0.4% MoM and 0.5% MoM, respectively.

  • Disposable personal income increased 0.5% MoM and was up by 0.5% or more on a monthly basis in each month in Q1 2025.
  • Real disposable income increased 0.5% MoM, the highest since January 2024.
  • Goods spending increased 0.9% MoM with durable spending surging 3.2% MoM (on strong auto sales), and services spending increased 0.6% MoM.

  

  • The PCE price index was unchanged on a monthly basis and up 2.3% YoY, slightly ahead of expectations of a 2.2% YoY increase.
  • The core PCE price index was also unchanged on a monthly basis and up 2.6% YoY, in line with expectation and the lowest annual rate since March 2021.

  Source
• US Personal Income and Outlays: February 2025 2025-03-28 08:30
  

  US personal income increased 0.8% MoM, and personal spending increased 0.4% MoM in February, the second straight month of income growth outpacing spending growth.

  • US personal income increased 0.8% MoM, above 0.4% MoM expected and the largest monthly increase since January 2024. Disposable income growth was 0.9% MoM, also the largest since January 2024.

  

  • The large increase in personal income was partly caused by a strong 2.2% MoM increase in personal current transfer receipts which could be a result of an increase in unemployment insurance payouts from DOGE layoffs or government buyouts of federal employees.
  • At 4.6%, the personal savings rate was the highest since June 2024.
  • Personal consumption expenditure was up 0.4% MoM, falling short of expectations of an 0.5% MoM increase but the largest of 2025 so far. Real personal spending growth was just 0.1% MoM.
  • Goods spending was up 0.9% MoM in February after a -1.7% MoM drop in January, likely driven by stronger auto sales.

  

  • Services spending was up just 0.2% MoM, the lowest monthly increase since August 2023.

  

  The PCE price index was up 0.3% MoM and 2.5% YoY in February, in line with expectations and unchanged from January.

  • The core PCE price index was up 0.4% MoM and 2.8% YoY in February, slightly above expectations of 0.3% MoM and 2.7% YoY. The annual rate was a tick higher than the January rate of 2.7% YoY.
  • The food component was flat on a monthly basis, and energy was up 0.1% MoM.
  • The PCE goods index was up 0.2% MoM and 0.4% YoY (prev 0.6% YoY), and the PCE services index was up 0.4% MoM and 3.5% YoY (prev 3.4% YoY).

  Source
• US Personal Income and Outlays: January 2025 2025-02-28 08:30
  

  Personal income jumped 0.9% MoM (vs 0.3% MoM expected), and personal spending fell -0.2% MoM (vs 0.1% MoM expected) in January, the weakest since an -0.6% MoM drop in February 2021.

  • Wages and salaries were up 0.4% MoM while supplements to compensation jumped 0.6% MoM.
  • Disposable personal income jumped 0.9% MoM, the largest increase since January 2024.
  • Goods spending was down -1.2% MoM with durables spending down -3.0% MoM and nondurables down -0.2% MoM, and services spending was up 0.3% MoM.
  • Real consumer spending was down -0.5% MoM, also the weakest since February 2021.
  • The drop in spending was a result in a large -$41.1 billion decline in motor vehicle & parts spending and a -$14.9 billion drop in spending on recreation goods.
  • This was offset by increase in spending on housing & utilities (+$29.0 billion) and food services and accommodations (+$13.0 billion), the two largest segments of spending growth in January.

  

  The PCE price index increased 0.3% MoM and 2.5% YoY, in line with expectations.

  • The energy index jumped 1.3% MoM and was up 1.0% YoY, the first positive annual rate since July 2024.
  • Food prices saw a moderate increase of 0.3% MoM and were up 1.6% YoY.
  • Core PCE inflation was 0.3% MoM and 2.5% YoY (down from 2.6% YoY previously), both also in line with expectations.
  • Goods prices advanced 0.5% MoM on strong energy with durables up 0.3% MoM and nondurables up 0.6% MoM. Goods annual rate was 0.6% YoY, the first positive reading in around a year.

  

  • Services prices were only up 0.2% MoM and the annual rate eased to 3.4% YoY (from 3.9% YoY previously), the lowest since March 2021.

  Source
• US Personal Income and Outlays: December 2024 2025-01-31 08:30
  

  Personal income grew 0.4% MoM in December, in line with expectations with disposable personal income also up 0.4% MoM. Personal consumption growth accelerated to a three month high of 0.7% MoM, beating projections of a 0.5% MoM increase. Goods spending growth remained strong at 0.9% MoM, and services spending growth saw a slight acceleration to 0.6% MoM. Real consumption growth was still strong at 0.4% MoM.

  

  The PCE price index increased 0.3% MoM, the highest monthly rate since April, and the annual rate was recorded at 2.6% YoY, in line with expectations. Core PCE inflation rates also came in as expected at 0.2% MoM and 2.8% YoY, unchanged from the November rate of 2.8% YoY. Both goods and services saw moderate increases at 0.2% MoM and 0.3% MoM respectively. Energy saw its first flare up since the beginning of 2024 at 2.7% MoM.

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• US Personal Income and Outlays: November 2024 2024-12-20 08:30
  

  Personal income increased 0.3% MoM in November, below expectations of an 0.4% MoM increase. Wage and salary growth was still robust however, at 0.6% MoM, the strongest since March. The main drag on income growth was a -0.1% MoM drop in receipts on assets.

  

  Personal spending increased 0.4% MoM, below expectations of 0.5% MoM. Goods spending bounced back, up 0.8% MoM, supported by strong spending on autos. Services spending was up just 0.2% MoM, the weakest since August 2023.

  

  The PCE price index and the core PCE price index increased just 0.1% MoM each both falling short of expectations of a 0.2% MoM. The annual rates also fell short of expectations by 0.1 ppts at 2.4% YoY and 2.8% YoY respectively. Goods prices were flat on the month, and services prices were up just 0.2% MoM. Market-based core PCE inflation was unchanged at 2.4% YoY for the third straight month.

  Source