US consumers’ incomes increase at slower rate than household expenditure in June
US citizens increased their personal spending above wage rises in June, despite a fall in real disposable incomes. However, this spending increase looks set to fall next month, as average weekly incomes fall 20 per cent in July.
On aggregate, US citizens received a $45.4bn (0.3 per cent) boost in personal income in June, lower than the downwardly revised $49.5bn (0.4 per cent) increase the month before (release).
Disposable income rose by $33.6bn, also 0.3 per cent, up from the $19.3bn/0.2 per cent increase the month before. In "real" (2009) dollars, however, disposable income fell by 0.1 per cent.
This was accompanied by a 0.5 per cent increase in household spending on goods and services, in line with expectations and following a 0.3 per cent increase the month before.
On a yearly basis, personal consumption expenditure in the US was up 0.5 per cent in June – a real increase of 0.1 per cent. Excluding seasonally volatile products like food and energy, personal consumption expenditure was up 0.2 per cent – in line with expectations and up from a 0.1 per cent increase the month before.
On a yearly basis, consumption expenditure increased by 1.3 per cent in June, up from a 1.1 per cent increase in May and in line with expectations. Core consumption expenditure rose 1.2 per cent, matching the upwardly revised 1.2 per cent increase the previous month.
The US Department of Labor also released data on average hourly earnings in July, which rose by 1.9 per cent (44 cents) to $23.98 compared to the year before, down from a 2.2 per cent increase in June. Analysts had expected earnings to increase by 2.2 per cent.
With the average American working 34.4 hours in a week (slightly less than the 34.5 reported in June), this means the average weekly wage in July was $824.19, down 20.4 per cent from the $1,035.00 in June
The news comes as it is revealed the number of new US jobs increased by just 162,000 in July, down from the revised 188,000 the month before and missing optimistic expectations.