Personal income was flat in June compared to May, much less than the consensus forecast of a 0.4% increase, and was up 2.6% from a year ago. Personal spending rose just 0.1%, matching the consensus forecast, and was up 4.1% from a year ago, the slowest rate of growth since August. The personal savings rate fell slightly to 3.8%.

Compared to a month ago, rental income led the way with a 0.6% increase. Wages and salaries followed with a 0.4% increase, with both private and government wages rising at about the same rate. Personal current transfer receipts rose 0.2% as veterans’ benefits rose 1.2% and unemployment insurance increased 1.1%, the first increase since December. On the downside, proprietors’ income slipped 0.1% as farm income fell for the third straight month. Personal income receipts on assets plunged 1.8% as dividend income fell 3.0% following a big 4.8% jump in May.

Compared to a year ago, rental income topped the charts, up 5.5%, as high home prices are pushing up rents. Personal current transfer receipts were up 3.1%, led by a sharp 6.1% increase in veterans’ benefits. Wages and salaries were up 2.5%, with private and government wages up by pretty much the same percentage. Proprietors’ income was up 2.2% as non-farm income was up 3.6% while farm income was down 40.1%. Income on assets was up just 2.0%, driven largely by interest income.

Wages and salaries accounted for just under half of the total increase in personal income on a year-ago basis, most of which came from private industry wages. On a month-ago basis, wages and salaries rose by $30.9 billion, but that was more than offset by the $43.8 billion decline in income on assets.

​The growth rate of personal tax payments slowed to 2.5% from a year ago, leaving disposable income up 2.6%. After factoring in inflation, real personal disposable income growth dipped from 1.4% to 1.2%, and real spending slowed from 3.0% to 2.7%. 

​With inflation and real income and spending growth slowing, the Federal Reserve’s decision to leave the Fed Funds rate unchanged at last week’s FOMC meeting looks like a wise decision. In fact, there really was no reason to raise it in June either, but they did. They may now be regretting that move. The market has certainly changed its tune as Treasury yields have declined after the late June spike. The market is telling the Fed that inflation is not a concern. The Fed should listen. 

​Personal income rose 0.4% in April from the prior month, matching the consensus forecast, and was up 3.6% from a year ago. Personal spending also rose 0.4%, matching the consensus forecast, and was up 4.4% from a year ago, the slowest rate of growth since September. As income and spending grew at the same rate, the personal savings rate held at 5.3% for the third consecutive month.

Compared to a month ago, rental income led the way again with a 0.9% increase. Wages and salaries followed with a 0.7% increase, driven by a 0.8% rebound in private industry wages after no change in March. Personal current transfer receipts were flat as social security payments rose just 0.1% while veterans’ benefits dipped and unemployment insurance plunged. Personal income receipts on assets fell 0.1% as an increase in dividend income was offset by a decline in interest income as interest rates fell during the month. Proprietors’ income declined 0.2% as both farm and non-farm income dropped on the month.

​Compared to a year ago, rental income also topped the charts, rising by a very strong 6.9%, as high home prices are pushing up rents. Proprietors’ income was up 3.9% as non-farm income was up 5.0% while farm income was still down 44.1%. Wages and salaries were up 3.7%, with private industry wage growth slipping to 3.7% to almost match government wage growth of 3.5%. Personal current transfer receipts were up 3.6%, with the strongest growth coming from Medicaid at 5.1%, while unemployment insurance was down 9.6%. Income on assets was up just 2.4%, driven primarily by interest income.

Wages and salaries accounted for just over half of the total increase in personal income on a year-ago basis, most of which came from private industry wages. However, wages and salaries accounted for nearly all of the increase on a month-ago basis, with the vast majority coming from private industry wages. Personal current transfer receipts saw the second highest contribution to yearly growth but only contributed 2% of monthly growth, most of which came from Medicare.

​The growth rate of personal tax payments slowed to 3.1% from a year ago, leaving disposable income up 3.7%. After factoring in inflation, real personal disposable income growth dipped from 2.0% to 1.9%, and real spending slowed from 3.1% to 2.7%. With inflation and real income and spending slowing, a Fed rate hike in June is looking less likely. 

​Personal income rose 0.2% in March from the prior month, less than the consensus forecast of 0.3%, and was up 4.5% from a year ago. Personal spending was flat for the second straight month, missing the 0.1% forecast, but was up 4.7% from a year ago, matching February’s pace but down slightly from January’s 4.9% pace, which was the strongest growth since November 2014. As income grew faster than spending, the personal savings rate inched up to 5.9% from 5.7%.

Compared to a month ago, rental income led the way with a 0.7% increase. Proprietors’ income followed with a 0.6% increase. Personal current transfer receipts rose 0.4% as social security payments rose 0.8% while unemployment insurance dropped 1.4%. Personal income receipts on assets rose 0.3%, almost all of which came from interest income. The all-important wages and salaries component increased by just 0.1% as government wages and salaries rose by 0.2% while private wages and salaries were flat.

Compared to a year ago, rental income also topped the charts, rising by a very strong 5.6%, as high home prices are pushing up rents. Wages and salaries were up 5.5%, with private industry wage growth of 5.9% far outpacing government wage growth of just 3.5%. Proprietors’ income was up 4.2% as non-farm income was up 5.4% while farm income was down 47%. Personal current transfer receipts were up 3.8%, with the strongest growth coming from veterans’ benefits at 5.2%, while unemployment insurance was down 9.0%. Income on assets was up just 2.6%, driven almost entirely by interest income.

Wages and salaries accounted for over half of the total increase in personal income on a year-ago basis, most of which came from private industry wages. However, wages and salaries accounted for only a tenth of the increase on a month-ago basis, most of which came from government wages. Personal current transfer receipts saw the second highest contribution to yearly growth but the highest contribution to monthly growth, most of which came from social security payments.

​A big 6.0% increase in tax payments from the prior year knocked the growth rate of personal disposable income down to 4.3% from 4.4%. However, real personal disposable income growth increased to 2.4% from 2.2% thanks to a decline in prices in March. This should help to support second quarter economic growth after a dismal first quarter. 

​Personal income rose 0.4% in February from the prior month, matching the consensus forecast, and was up 4.6% from a year ago, the strongest growth since May 2015. Personal spending rose just 0.1%, less than the 0.2% forecast, but was up 4.8% from a year ago, down slightly from January’s 4.9% pace, which was the strongest growth since November 2014. As income grew faster than spending, the personal savings rate inched up to 5.6%.

Compared to a month ago, rental income led the way with a 0.8% increase. The all-important wages and salaries component increased by 0.5%. Income on assets, such as interest and dividends, was up 0.2% as interest income rose while dividend income declined.
Personal current transfer receipts, such as Social Security, Medicare, Medicaid and unemployment insurance, also rose 0.2%, as Medicare payments increased while unemployment insurance payments fell again. Proprietors’ income rose just 0.1%.

Compared to a year ago, rental income also topped the charts, rising by a very strong 6.5%, as high home prices are pushing up rents. Wages and salaries were up 5.5%, with private industry wage growth of 6.0% far outpacing government wage growth of just 3.4%. Personal current transfer receipts were up 3.8%, with the strongest growth coming from Medicaid at 5.6%, while unemployment insurance was down 9.4%. Proprietors’ income was up just 3.6%, weighed down by a huge 51% drop in farm income. Income on assets was up just 2.9%, driven almost entirely by interest income.

​Wages and salaries accounted for over half of the total increase in personal income on both a monthly and yearly basis in February, which mostly came from private industry wages. Rental income and supplements to wages and salaries, such as for pension and social insurance, each accounted for 10% of the monthly increase in income. Personal current transfer receipts only accounted for 8% of the increase in income in February after accounting for almost half of the increase in January. 

​Despite a big 5.5% increase in tax payments from the prior year, personal disposable income was up 4.4% from a year ago, the best since early 2015. However, real personal disposable income was up just 2.3% and the rate of growth has been slowing for two years. With inflation expected to accelerate in the coming months, real economic growth may not be too impressive, especially if a Fed rate increase starts to weigh on the housing market. 

Personal income rose 0.4% in January from the prior month, beating the 0.3% consensus forecast, and was up 4.0% from a year ago, the strongest growth since December 2015. Personal spending rose just 0.2%, less than the 0.3% forecast, but was up 4.7% from a year ago, the strongest growth since November 2014. With income growing faster than spending, the personal savings rate inched up to 5.5% of personal disposable income.

Compared to a month ago, rental income led the way with a 1.0% increase. Personal current transfer receipts, such as social security, Medicare, Medicaid and unemployment insurance, rose 0.8%, as did proprietors’ income, thanks in part to the first increase in farm income in several months. The all-important wages and salaries component increased by 0.4%, with both private industry and government wages seeing healthy gains. Meanwhile, income on assets, such as interest and dividends, were flat on the month.

Compared to a year ago, rental income also topped the charts, rising by a very strong 7.3%, as high home prices are pushing up rents. Wages and salaries were up 4.5%, with private industry wage growth of 4.8% far outpacing government wage growth of just 3.0%. Personal current transfer receipts were up 3.7%, with the strongest growth coming from Medicaid at 6.2%, followed closely by veterans’ benefits at 6.1%, while unemployment insurance was down 9.1%. Proprietors’ income was up just 3.3%, weighed down by a huge 42% drop in farm income from the prior year. Income on assets was up just 2.6%, driven almost entirely by interest income as dividends were virtually flat.

​Wages and salaries accounted for over half of the total increase in personal income on both a monthly and yearly basis in January, which mostly came from private industry wages. A third of the monthly increase came from personal current transfer receipts, primarily due to a large 1.0% increase in social security.

​Despite a big 4.5% increase in tax payments from the prior year, personal disposable income was up 4.0% from a year ago, in line with recent trends. However, when inflation is taken into account, real personal disposable income was up just 2.0% and the rate of growth has been slowing. With inflation expected to accelerate in the coming months, real economic growth may not be too impressive, especially if a Fed rate increase starts to take a bite out of the housing market.