23 Dec 2015
US personal income and spending - Nomura
FXStreet (Guatemala) - Analysts at Nomura noted that personal income increased by 0.3% m-o-m in November, above market expectations but below our forecast (Nomura: 0.4%, Consensus: 0.2%).
Key Quotes:
"Personal spending increased by 0.3% m-o-m in November following a revised flat reading in October (previously reported as +0.1% m-o-m). Personal spending rebounded on stronger goods spending while service spending lagged behind.
A bulk of the weakness in service spending came from energy services, which took a tumble as the weather has been unseasonably warm across large swaths of the country.
On inflation, the PCE deflator was unchanged over the month (0.4% y-o-y) in November, below expectations but right in line with our expectations (Nomura: 0.0% m-o-m, Consensus: 0.1% m-o-m). Core PCE increased by 0.1% m-o-m (unrounded: 0.0114%), in line with expectations (Nomura: 0.0110% m-o-m, Consensus: 0.1% m-o-m), which left the year-over-year metric at 1.3% y-o-y.
In line with our expectations, health care prices remained subdued only increasing by 0.06% m-o-m, well below the CPI’s measure, which increased by 0.4% m-o-m in November. The discrepancy is likely attributable to the different source data used in calculating the respective indexes.
Looking ahead, an expected waning of the negative base-effect will likely boost core PCE inflation to some extent. But as long as the underlying trend of medical care inflation (which carries a decent amount of weight in the core index) does not pick up, core PCE inflation is unlikely to accelerate materially."
Key Quotes:
"Personal spending increased by 0.3% m-o-m in November following a revised flat reading in October (previously reported as +0.1% m-o-m). Personal spending rebounded on stronger goods spending while service spending lagged behind.
A bulk of the weakness in service spending came from energy services, which took a tumble as the weather has been unseasonably warm across large swaths of the country.
On inflation, the PCE deflator was unchanged over the month (0.4% y-o-y) in November, below expectations but right in line with our expectations (Nomura: 0.0% m-o-m, Consensus: 0.1% m-o-m). Core PCE increased by 0.1% m-o-m (unrounded: 0.0114%), in line with expectations (Nomura: 0.0110% m-o-m, Consensus: 0.1% m-o-m), which left the year-over-year metric at 1.3% y-o-y.
In line with our expectations, health care prices remained subdued only increasing by 0.06% m-o-m, well below the CPI’s measure, which increased by 0.4% m-o-m in November. The discrepancy is likely attributable to the different source data used in calculating the respective indexes.
Looking ahead, an expected waning of the negative base-effect will likely boost core PCE inflation to some extent. But as long as the underlying trend of medical care inflation (which carries a decent amount of weight in the core index) does not pick up, core PCE inflation is unlikely to accelerate materially."