Dollars and Jens
Tuesday, August 05, 2008
income and spending
NIPA came out yesterday, with both spending and income a bit better than expected. Income was positive in nominal terms, though just barely, while spending was up 0.6%, or -0.2% in real terms. Those figures are about 0.2% points higher than the forecasts I saw.
Personal current taxes increased $217.1 billion in June, in contrast to a decrease of $376.2 billion in May. Provisions of the Economic Stimulus Act of 2008 reduced the level of personal current taxes by $185.0 billion (at an annual rate) in June, $397.5 billion in May, and $15.5 billion in April. The reductions in current personal taxes reflected rebate payments to eligible individual taxpayers (see box below). Disposable personal income (DPI) -- personal income less personal current taxes -- decreased $210.3 billion, or 1.9 percent, in June, in contrast to an increase of $595.4 billion, or 5.7 percent, in May.
Income from employment from March to June climbed fairly smoothly at a 2.8% annual pace, which is just slightly ahead of the 2.6% the Dallas Fed's trimmed-mean PCE inflation rate recorded over that time, but is well under the broader inflation measures.

The NIPA data continue to be more supportive of a recession call than GDP, though the last couple months have been complicated by deliberate fiscal policy. The next report comes out just before Labor Day weekend.

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