Economic Reports 10/30/06
Sept Personal Income +0.5% vs prior +0.4%; Spending +0.1% vs prior +0.2% Full Report
Inside the number: Personal Consumption Expenditures (PCE) falling in current dollars +0.1% vs prior +0.2%. But, rising in Chained 2000 dollars +0.4% vs prior -0.1%.
Disposable Personal Income rising in Chained 2000 dollars +0.8% vs prior +0.2%.
Further inspection shows the gains were in dividents and rents as non farm income actually DECREASED -.5 Billion vs prior increase of 9.9 Billion, a drop of over $10 Billion.
33% of the increase in PCE was attributed to increased motor vehicle sales, which is curious and dubious considering motor vehicle sales are DOWN and plummeting YOY. Does this mean less vehicles were sold at HIGHER prices??
Further inspection reveals that the monthly % change from 1 year ago: Disposable Income +3.9%; PCE +3.4%; Durable Goods +8.5%; Non Durable Goods +3.1%; Services +2.6%.
Bottom line: 1st, the increase in disposable personal income (DPI) is illusory, being due to a temporary fall in energy prices and tilted towards those benefitting from large capital reserves.
2nd, the real YOY rise in PCE and chained dollar spending reflects rising prices due to the long term effect of energy price shocks in the supply chain and dollar debauchery.
Moral of the story: despite fanciful statistical manipulation of the numbers, you cannot make this pig look pretty by putting more lipstick on it.
Inside the number: Personal Consumption Expenditures (PCE) falling in current dollars +0.1% vs prior +0.2%. But, rising in Chained 2000 dollars +0.4% vs prior -0.1%.
Disposable Personal Income rising in Chained 2000 dollars +0.8% vs prior +0.2%.
Further inspection shows the gains were in dividents and rents as non farm income actually DECREASED -.5 Billion vs prior increase of 9.9 Billion, a drop of over $10 Billion.
33% of the increase in PCE was attributed to increased motor vehicle sales, which is curious and dubious considering motor vehicle sales are DOWN and plummeting YOY. Does this mean less vehicles were sold at HIGHER prices??
Further inspection reveals that the monthly % change from 1 year ago: Disposable Income +3.9%; PCE +3.4%; Durable Goods +8.5%; Non Durable Goods +3.1%; Services +2.6%.
Bottom line: 1st, the increase in disposable personal income (DPI) is illusory, being due to a temporary fall in energy prices and tilted towards those benefitting from large capital reserves.
2nd, the real YOY rise in PCE and chained dollar spending reflects rising prices due to the long term effect of energy price shocks in the supply chain and dollar debauchery.
Moral of the story: despite fanciful statistical manipulation of the numbers, you cannot make this pig look pretty by putting more lipstick on it.
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