Personal Income on Target, but These Problems Linger in the Data

Hold that wallet! The latest consumer driven economic indicator has been tallied, and Personal Income and Outlays increased by .04% in the month of April 2011, according to today’s news release from the Bureau of Economic Analysis. This growth rate was on par with market expectations, though the increase in Personal Income was marginal considering it has remained constant at that level since February, when it had fall -.7% from 1.1% growth in prior months.

Income and Outlays purports to measure the % change in the average dollar value the American worker receives over the course of the selected month (Income), and compares it to the % change in average dollar value of goods and services purchased by the average consumer over that same period of time (Outlays). The measure consists of three major sub-components, Personal Income, Disposable Personal Income, and Personal Consumption Expenditures.

According to the BEA report, last month personal income rose by .4%, with disposable personal income accounting for .3% of that change, and consumption expenditures also rising by .4% Some good news to be found in the details, “private wage and salary disbursements increased $27.3 billion in April, compared with an increase of $ 20.6 billion in March.” Despite seeing growth in wages and salaries, consumers in the month of April made less money from supplemental resources (such as proprietors income, rental income, and contributions from government insurance) than they did in March with value of total supplemental income falling from 4.3-4.2 billion dollars over that span of time.

Personal savings (calculated by subtracting outlays from disposable income), a troubling issue for American’s in the recent past, fell by over $6 billion total compared to March. The market has taken news of the report kindly, and is up slightly in trading this morning.

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