Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  Personal Income Rose 0.3% in September
Posted Under: Data Watch • PIC
Supporting Image for Blog Post

 

Implications:  Treats, not tricks, from this morning's reports, as incomes rose a healthy 0.3% in September following a 0.5% gain in August, and spending followed suit.  And the gain in income came despite a $1.9 billion annualized downward impact from the United Auto Worker's strike.  With that strike now in the books, the headwind to the data in September will become a tailwind in the months ahead.  Even with the impact of the strike, incomes continue to march forward at a healthy clip, and are up 4.9% in the past year.  Importantly, those gains have been led by private sector wages and salaries, which are up 5.7% in the past year.  So, while wages and salaries saw little movement in September (income gains for the month were led by interest income, farm subsidies, and transfer payments), we chalk this up to monthly volatility, and the trend continues to show wages are the key factor driving incomes higher.  Spending, meanwhile, rose 0.2% in September and is up 3.9% in the past year.  Within spending, the strongest contributor to growth in August was durable goods, which rose 0.4%, led by new vehicles.  Spending on services (which accounts for the majority of spending) rose a respectable 0.2% in September on the back of higher health care outlays.  This is not the type of data that supports the rate cut we got from the Federal Reserve yesterday, and certainly doesn't signal any reason to believe a recession is nigh.  Thankfully, the Fed signaled yesterday they now believe a pause is warranted until we see a material change in the economic outlook. Their greatest concern (outside of the China trade dispute and modest international growth – neither of which they are tasked with addressing) has been inflation, which continues to run below its 2% target.  PCE prices were unchanged in September and are up 1.3% in the past year, while "core" prices, which exclude the volatile food and energy sectors, were unchanged in September but up 1.7% in the past twelve months.  The more reliable "core" measure is what the Fed will be focused on, and that isn't far off the 2.0% target.  In employment news this morning, initial jobless claims rose 5,000 last week to 218,000, while continuing claims rose 7,000 to 1.690 million. Plugging this data into our models suggests nonfarm payrolls rose 85,000 in October, held down by the GM strikes, which will then provide a boost in November.  On the manufacturing front, the Chicago PMI index fell to 43.2 from 47.1 in September. In spite of the decline, other regional manufacturing surveys were up in October, and we expect tomorrow's national ISM report to rise to 49.6 in October from 47.8 last month.

Click here  for PDF version

Posted on Thursday, October 31, 2019 @ 11:09 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
 PREVIOUS POSTS
Finally, A Pause
The First Estimate for Q3 Real GDP growth is 1.9% at an Annual Rate
Another Fed Rate Cut on the Way
M2 and C&I Loan Growth
New Single-Family Home Sales Declined 0.7% in September to a 701,000 Annual Rate
New Orders for Durable Goods Fell 1.1% in September
Existing Home Sales Declined 2.2% in September
More Tepid GDP Growth in Q3
M2 and C&I Loan Growth
Housing Starts Declined 9.4% in September
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011
Expand 20102010

Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.