Personal Income drops 1.3% in July

Things cost more. People have less money. This is bad.

New statistics on June 2009 personal income were released today.

Personal income decreased $159.8 billion, or 1.3 percent, and disposable personal income (DPI) decreased $143.8 billion, or 1.3 percent, in June, according to the Bureau of Economic Analysis.

Personal consumption expenditures (PCE) increased $41.4 billion, or 0.4 percent. In May, personal income increased $155.1 billion, or 1.3 percent, DPI increased $168.7 billion, or 1.6 percent, and PCE increased $9.0 billion, or 0.1 percent, based on revised estimates.

The MSM will blame the worst month-to-month drop in 4 years to Stimulus one time payments.

So, what is the year to year? June 2008, $12,354.2. July 2009, $11,934.9. Population June 2008, 304,360. Population June 2009, 307,104.

Absolute drop: $419.3 Billion, -3.4%. Relative to population: -4.3%.

Wages and salaries dropped almost twice what they were in May, but note manufacturing payrolls decreased less and service sector wages were hammered.

Wages & Salaries

Private wage and salary disbursements decreased $28.6 billion in June, compared with a decrease of $11.3 billion in May. Goods-producing industries' payrolls decreased $11.1 billion, compared with a decrease of $10.9 billion;

manufacturing payrolls decreased $6.7 billion, compared with a decrease of $8.4 billion. Services-producing industries' payrolls decreased $17.5 billion, compared with a decrease of $0.4 billion. Government wage and salary disbursements increased $2.8 billion, compared with an increase of $4.3 billion.

The only ones making money are landlords. Rental income has increased, $2.8 billion.

Savings? Remember how we were told people were saving? That dropped as well, from 6.2% to 4.6%.

This is bad, anyway you slice it...

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But...

Real PCE dropped. So the increase in PCE is attributed to higher prices. Income is dropping but prices are increasing that is not a good mix.

Question: So does this mean that any temporary economic stimulus was saved in May and not spent. Just like it was in 2008.

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exercise for the reader

That's my suspicion and I believe midtowng's as well. But we need to go digging into the statistics to prove it.

This BEA release has tables with monthly stats and you see an anomaly right when those receiving SS got rebates.

Those were $250 to 50 million people, done in May. I bet you can calculate the bump in savings to a dime. ;)
(This release is June).

On the PCE, I think a blog post titled "Nickled and Dimed to Death" is in order.

Did you notice landlords are making money? The legal population increase (lord knows about the illegal one but I read they aren't leaving) ~300k and that doesn't correlate
to that much rental income upon first glance....

so....did rents rise in the middle of a recession? another exercise for the reader.

I went looking to make sure I was calculating things right and unfortunately FRED doesn't have any updated graphs either, because I couldn't believe my eyes when I calculated the yearly percentage drop and it would be even higher if one ignores

I think I'm correct and what's weird is I didn't see any other sites looking at those figures in terms of percentages or on a yr-yr basis.

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Re: Landlord rent

What could be happening is that costs are rising for property owners in the form of utility costs and taxes which is then passed on to tenants in the form of higher rents?

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landlord rents another exercise for the reader then

It could be, or it could be landlords are just greedy bastards....so yet another subtopic to be analyzed as to where these increased profits are coming from.

BTW: One of my favorite sayings is "an exercise for the reader", simply because so many textbooks say that when it really means the author of the book didn't solve it. ;)

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