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The U.S. income report exactly tracked estimates.

The U.S. income report exactly tracked estimates across all the major indicators, with July gains of 0.3% for income and 0.4% for consumption, after small downward revisions in income and consumption levels implied in yesterday's GDP report. The savings rate slipped to 6.7% in July from 6.8% in May and June. Analysts saw a 0.2% "real" July consumption gain with PCE chain price increases of 0.1% for the headline and 0.2% for the core that undershot the July CPI mix of 0.2% gains for both. Analysts now expect Q3 growth of 4.4% for total income and 4.6% for disposable income, after respective Q2 rates of 4.2% (was 4.3%) and 4.2% (was 4.5%). Analysts expect 2018 growth of 4.6% for total income, 5.1% for disposable income, and 0.9% for "current tax and nontax payments," with restraint for the later from tax cuts that have depressed 2018 tax receipts. Analysts saw respective 2017 growth rates of 4.4%, 4.4%, and 4.1%. Analysts left our Q3 GDP growth estimate at 3.5%, following the 4.2% clip in Q2, with real consumption growth of an estimated 3.2% in Q3 after a 3.8% Q2 clip, as spending growth bounced through Q2 after a weak Q1 performance, and is now moderating to a still-firm rate in Q3.

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Publication:The Fly
Date:Aug 30, 2018
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