Personal Income & Expenditures Increase in October 2010

The BEA (Bureau of Economic Analysis, U.S. Dept. of Commerce) reports that Personal Income and Personal Income Expenditures increased in October 2010.  The headlines:

Personal income increased $57.6 billion, or 0.5 percent, and disposable personal income (DPI) increased $48.3 billion, or 0.4 percent, in October, according to the Bureau of Economic Analysis.  Personal consumption expenditures (PCE) increased $44.0 billion, or 0.4 percent. In September, personal income decreased $2.8 billion, or less than 0.1 percent, DPI decreased $8.6 billion, or 0.1 percent, and PCE increased $26.9 billion, or 0.3 percent, based on revised estimates.

Real disposable income increased 0.3 percent in October, in contrast to a decrease of 0.2 percent in September. Real PCE increased 0.3 percent, compared with an increase of 0.2 percent.

This data accounts for over 2/3rds of GDP.  This is the first report going into 4Q2010, and already we are seeing better data than 3Q2010.  The challenge in reviewing this data is to spot significant trends.

No significant trends were spotted in the data with the savings rate remaining in this years range of 5.7% of disposable income.  Income and expenditures grew on a per capita basis.  The only newsworthy blip came when reviewing the chained dollar (equal value dollar) data for personal expenditures for services – it showed a contraction.

One month of data is not a trend, however it begs the question if price cutting is now happening in personal services??

Personal income increased $57.6 billion, or 0.5 percent, and disposable personal income (DPI)
increased $48.3 billion, or 0.4 percent, in October, according to the Bureau of Economic Analysis.
Personal consumption expenditures (PCE) increased $44.0 billion, or 0.4 percent.  In September,
personal income decreased $2.8 billion, or less than 0.1 percent, DPI decreased $8.6 billion, or
0.1 percent, and PCE increased $26.9 billion, or 0.3 percent, based on revised estimates.

Real disposable income increased 0.3 percent in October, in contrast to a decrease of 0.2 percent in
September.  Real PCE increased 0.3 percent, compared with an increase of 0.2 percent.
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