The latest Personal Income and Outlays report from the U.S. Department of Commerce spelled out some bad news for third quarter GDP estimates as, while the impact of the recent storm Hurricane Harvey could not be qualified in the report, it’s impact was clearly significant.
According to the report, personal income increased by an expected 0.2 percent in the month of August 2017, with upward boosts from proprietor income, transfer receipts, and rent. Wages and salaries, meanwhile, were unchanged based on a decline in hours.
Disposable personal income (DPI) however, increased at a mere 0.1 percent. A likely result of the destruction caused by Hurricane Harvey, coupled with a decline in auto sales, spending on durables experienced the steepest decline, falling by 1.1 percent compared with a 0.3 percent increase in spending on nondurables and a 0.3 percent increase in spending on services.
Excluding food and energy, the PCE price index increased by only 0.1 percent, with the year-on-year rate falling to 1.3 percent, the weakest reading since November of 2015.