Friday, September 30, 2011

Personal Income Fell 0.1% in August

Personal income fell 0.1% during August, the first decline since October 2009 according to a Bureau of Economic Analysis report released this morning. Wage income drove the decline posting a fall of 0.2%.
Dividend and rental income provided support for some, mostly upper income consumers; however, interest income growth remains weak. Also, growth in transfer payments has slowed dramatically.

Declining wages and personal income in August caused consumer spending to post a modest increase. Consumer spending rose 0.2% just enough to keep up with inflation. The savings rate fell for the second month to 4.5%, the lowest level since December 2009, as consumers reduce savings to avoid declines in their real spending.

Consumer prices rose 0.2% in August a smaller increase than seen in July (0.4%). Core inflation rose 0.1%, the slowest since March. Inflation remains low but is rising.

Read the release.

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