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Personal Consumption Expenditure: Difference between revisions
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== Personal Consumption Expenditure(PCE) Developments == | == Personal Consumption Expenditure(PCE) Developments == | ||
=== January 2023 === | |||
US Commerce department announced that the core personal consumption expenditure rose 0.6% in January and 4.7% year-over-year. This was above the wall street expectations for a 0.5% rise in the month and 4.4% year-over-year increase. Headline Personal Consumption Expenditure rose 0.6% and 5.4%, respectively. Similarly, consumer spending rose 1.8% in January versus 1.4% estimate while Personal income rose 1.4%, higher than the 1.2% estimate. These numbers indicate that inflation remained sticky at the start of the new year. The rise mostly came from energy prices which rose 2% in January. Food prices increased 0.4% while goods and services both rose 0.6%.<ref>https://www.cnbc.com/2023/02/24/key-fed-inflation-measure-rose-0point6percent-in-january-more-than-expected.html</ref> It is believed that the "Spending was likely driven by a 8.7% cost of living adjustment, the biggest increase since 1981, for more than 65 million Social Security beneficiaries, which boosted income."<ref>https://www.reuters.com/markets/us/us-inflation-accelerates-january-consumer-spending-surges-2023-02-24/</ref> | |||
==== '''Highlights''' <ref>https://www.bea.gov/sites/default/files/2023-02/pi0123_fax.pdf</ref> ==== | |||
* The increase in personal income primarily reflected an increase in compensation. The increase reflected increases of $78.0 billion in services-producing industries and $22.0 billion in goods-producing industries. | |||
* Within goods, the largest contributors to the increase were motor vehicles and parts (led by new light trucks), based on unit sales and “other” nondurable goods (led by pharmaceutical products and recreational items) | |||
* Within services, the largest contributor to the increase was food services and accommodations (led by purchased meals and beverages) | |||
* Government social benefits decreased in January, reflecting a decrease in “other” benefits that was partly offset by an increase in Social Security. | |||
* The personal saving rate (that is, personal saving as a percentage of disposable personal income) was 4.7 percent in January, compared with 4.5 percent in December. | |||
* Real disposable personal income increased 1.4 percent in January and real consumer spending increased 1.1 percent; spending on goods increased 2.2 percent and spending on services increased 0.6 percent. | |||
=== February 2023 === | |||
U.S PCE declined to 5% on a yearly basis in February from 5.3% in January. It was expected to decline by 5.3%. Meanwhile, Core PCE dropped to 4.6% on a yearly basis from 4.7% in January. It was expected to remain flat. On a monthly basis, both headline PCE and core PCE grew 0.3%. Core PCE was expected to rise by 0.4%. | U.S PCE declined to 5% on a yearly basis in February from 5.3% in January. It was expected to decline by 5.3%. Meanwhile, Core PCE dropped to 4.6% on a yearly basis from 4.7% in January. It was expected to remain flat. On a monthly basis, both headline PCE and core PCE grew 0.3%. Core PCE was expected to rise by 0.4%. | ||
Personal income rose 0.3% versus 0.2% estimate while Consumer spending rose 0.2% versus 0.3% estimate<ref>https://www.cnbc.com/2023/03/31/fed-inflation-gauge-february-2023-.html#:~:text=Key%20Fed%20inflation%20gauge%20rose%200.3%25%20in%20February%2C%20less%20than%20expected,-Published%20Fri%2C%20Mar&text=The%20personal%20consumption%20expenditures%20price,This%20is%20breaking%20news.</ref>. | Personal income rose 0.3% versus 0.2% estimate while Consumer spending rose 0.2% versus 0.3% estimate<ref>https://www.cnbc.com/2023/03/31/fed-inflation-gauge-february-2023-.html#:~:text=Key%20Fed%20inflation%20gauge%20rose%200.3%25%20in%20February%2C%20less%20than%20expected,-Published%20Fri%2C%20Mar&text=The%20personal%20consumption%20expenditures%20price,This%20is%20breaking%20news.</ref>. | ||
'''Highlights''' | ==== '''Highlights''' ==== | ||
* Personal income increased, primarily reflecting an increase in compensation | * Personal income increased, primarily reflecting an increase in compensation | ||
* The personal saving rate was 4.6 percent in February, compared with 4.4 percent in January. | * The personal saving rate was 4.6 percent in February, compared with 4.4 percent in January. | ||
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* Real disposable personal income increased 0.2 percent in February. Real consumer spending decreased 0.1 percent reflecting 0.1 percent declines in both spending on goods and spending on services | * Real disposable personal income increased 0.2 percent in February. Real consumer spending decreased 0.1 percent reflecting 0.1 percent declines in both spending on goods and spending on services | ||
=== March 2023 === | |||
* Personal Consumption Expenditure(PCE) rose 0.1% in March after rising 0.3% in the previous month. In the 12 months through March, it rose 4.2% versus 5.1% growth in February. | |||
* Core PCE rose 0.3% in March in-line with estimates and unchanged from February. Yearly, it rose 4.6%, above the 4.5% estimate but below the 4.7% growth in February. | |||
* The headline number was softer as energy prices slid 3.7% for the month while food costs declined 0.2%. Goods prices fell 0.2% while services increased 0.2%. | |||
* Personal income rose 0.3% in March, above the 0.2% estimate while consumer spending was flat as expected. | |||
=== April 2023 === | |||
* | * Core PCE rose 0.4% in April, above 0.3% estimate. | ||
* | * On an annual basis, core PCE increased 4.7% versus 4.8% estimate. | ||
* | * Headline PCE also rose 0.4% and was up 4.4% from a year ago, higher than the 4.2% rate in March. | ||
* Spending rose 0.8% for the month, while personal income accelerated 0.4%, both numbers were expected to increase 0.4%. Price increases were spread almost evenly, with goods rising 0.3% and services up 0.4%. | |||
* | * Real consumer spending increased 0.5 percent, reflecting increases in spending on goods of 0.8 percent and spending on services of 0.3 | ||
* Real | * The personal saving rate was 4.1 percent in April. | ||
== Personal Consumption Expenditure(PCE) == | == Personal Consumption Expenditure(PCE) == | ||