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Personal Income and Outlays
Definition
Personal income is the dollar value of income received from all sources by individuals. Personal outlays include consumer purchases of durable and nondurable goods, and services.  Why Investors Care

Released on 4/29/05 For Mar 2005
Personal Income, M/M change
 Actual 0.5%  
 Consensus 0.4%  
 Consensus Range 0.2%  to  0.6%  
    
Consumer Spending, M/M change
  Actual 0.6%  
 Consensus 0.5%  
 Consensus Range 0.5%  to  0.7%  

Highlights
Personal income rose a firm 0.5% in March with personal spending, boosted largely by motor vehicles & parts, up a sharp 0.6%.

The deflator for personal consumption expenditures (PCE) rose a sharp 0.5%, with the core PCE deflator showing less pressure at a gain of 0.3% following a 0.2% rise in February. Year-on-year increases are not alarming, at 2.4% overall and 1.7% for the core.

Though this is a monthly report, the data were already incorporated in yesterday's advance first-quarter GDP report and should have little impact, if any, on the financial markets. The core PCE deflator for the first quarter, again reported yesterday, rose 2.2%.

Gains in private wages & salaries in March were solid at 0.3%, offset in part by continued declines in rental income. This morning's employment cost index report, which accompanied this report at 8:30 a.m. ET, showed only moderate income gains for the first quarter.

The effect of high gas prices is difficult to pinpoint but they may be behind a decline in the savings rate to 0.4% from 0.5% in February. The March reading is a multi-year low.

Market Consensus Before Announcement
Personal income inched up 0.3 percent in February. In March, growth is not expected to show much improvement since nonfarm payrolls grew less than half as fast and the average workweek was unchanged. The faster growth in hourly earnings may have helped slightly, but not much. Personal consumption expenditures grew 0.5 percent in February. Retail sales increased more slowly in March - and this points to slower growth in personal consumption expenditures as well.

Personal income Consensus Forecast for Mar 05: 0.4 percent
Range: 0.2 to 0.6 percent

Personal consumption expenditures Consensus Forecast for Mar 05: 0.5 percent
Range: 0.5 to 0.7 percent
Trends
[Chart] Changes in taxes or social security cost of living adjustments can cause some sharp variations in monthly disposable income growth. However, on the whole, monthly changes in disposable income fluctuate less than monthly changes in personal consumption expenditures.

[Chart] Monthly changes in personal consumption expenditures are usually skewed by large changes in spending on durable goods. Spending on nondurable goods and services tend to be less volatile from one month to the next.
Data Source: Haver Analytics
Personal Income and Outlays: 2005 Release Schedule
Released On: 1/31 2/28 3/31 4/29 5/27 6/30 8/2 9/1 9/30 10/31 12/1 12/22
Released For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov


 
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