Personal Income Shows Steeper Than Expected Decline In July

(RTTNews) - Friday morning, the Department of Commerce released its report on personal income and spending in the month of July, showing that personal income decreased by much more than expected while personal spending showed a modest increase.

The report showed that personal income fell 0.7 percent in July following a 0.1 percent increase in June and a 1.8 percent increase in May. Economists had been expecting a much more modest decrease of about 0.2 percent.

A reduction in the amount of rebate checks sent out by the government as part of economic stimulus plan contributed to the notable decrease in personal income in July.

The Commerce Department said that the federal government issued $13.7 billion in rebate payments in July compared to $27.9 billion in June and $48.1 billion in May.

At the same time, the report showed that private wage and salary disbursements increased by $13.2 billion in July compared with an increase of $7.9 billion in June. Additionally, supplements to wages and salaries increased by $3.8 billion in July after an increase of $3.3 billion in June.

The Commerce Department also said that personal spending edged up 0.2 percent in July compared to a 0.6 percent increase in the previous month. The modest increase in personal spending came in line with economist estimates.

With personal income falling and personal spending rising, the report showed that personal saving as a percentage of disposable personal income fell to 1.2 percent in July from 2.5 percent in June.

The Commerce Department added that its reading on core consumer prices, which exclude food and energy prices, showed an increase of 0.3 percent in July, matching the increase that was seen in the previous month.

On an annual basis, the pace of core consumer price growth accelerated to 2.4 percent in July from 2.3 percent in June.

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Posted in Categories: Economy, Forex, Releases, USA.

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