Monday, May 01, 2006

Personal Income Numbers Break Through

Anyone who reads this site will know I am always voraciously consuming economic data. Recent calls on spending growth based on wage data seemed to outweigh the negatives facing consumer spending .

The two different wage numbers I've discussed here so far include the "production hourly wage" which is rising at Bureau of Labor Statistics and the overall income numbers, also through the BLS. Both of these numbers represent only salaries drawn by wage workers. If you get stock options, rent out property, own stocks, or have your own business it doesn't count for these numbers. I have grown very worried about this exclusion because Americans are increasingly becoming a society where people own assets and use them to supplement their income.

Today that point was driven firmly home by the Bureau of Economic Analysis with their Personal Income numbers. The nice thing about the personal income numbers is that it includes non-wage income including proprietor income, rental income, and so on.

The Personal Income numbers for March were up 0.8% and disposable personal income (the fuel for consumer spending) was also up 0.8%. This growth rate is phenomenal. It both supports the notion that consumer spending can continue and reinforces my concerns about inflation and makes me glad I bet against bond prices.

If you want some real number-crunching fun start here and check out the breakdown in personal expenditures by category over time. First one to give me a really good idea what to do with this data gets a Wonk of the Day award.
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