Archive for June, 2012

Real Disposable Personal Income Picks Up

Personal income increased 0.2 percent in May, the same increase as in April. The increase in wages and salaries was less than 0.1 percent in May, compared with an increase of 0.1 percent in April.

Current-dollar disposable personal income (DPI)—after-tax income—increased 0.2 percent in May, the same increase as in April.

Real DPI— income adjusted for taxes and inflation—increased 0.3 percent in May after increasing 0.1 percent in April.

Real consumer spending—spending adjusted for price changes—increased 0.1 percent in May, the same increase as in April. Spending on durable goods fell 0.4 percent in May after falling 0.1 percent in April, while spending on nondurable goods rose 0.3 percent after rising 0.1 percent.

Prices decreased 0.2 percent in May after remaining flat in April. Excluding food and energy, prices increased 0.1 percent in May, the same increase as in April.

Personal saving as a percent of DPI was 3.9 percent in May, compared with 3.7 percent in April.

To learn more about personal income and outlays, read the full report.

GDP Growth Slows in First Quarter

Real gross domestic product (GDP) rose 1.9 percent in the first quarter of 2012 after rising 3.0 percent in the fourth quarter, according to estimates released by the Bureau of Economic Analysis. The first-quarter growth rate was unchanged from the second estimate released in May.

GDP highlights
Net exports increased (after decreasing in the fourth quarter), consumer spending accelerated, and residential housing investment picked up in the first quarter. These positive economic contributions, however, were more than offset by a slowdown in inventory investment.

The slowdown in inventory investment reflected a sharp downturn in the manufacturing and wholesale industries. In contrast, retail inventory investment turned up, especially by motor vehicles dealers.

Revisions to GDP
For the third estimate of first-quarter real GDP growth, upward revisions to net exports and business investment in structures were offset by downward revisions to consumer spending, inventory investment, and state and local government spending.

Disposable income and saving
Real disposable personal income—which adjusts personal income for taxes and inflation—rose 0.7 percent in the first quarter, compared with 0.2 percent in the fourth quarter. The personal saving rate—saving as a percentage of disposable personal income—was 3.7 percent, compared with 4.2 percent in the fourth quarter. The personal saving rate has declined for six quarters in a row.

Corporate profits
First-quarter corporate profits fell 0.3 percent at a quarterly rate following a 0.9 percent rise in the fourth quarter. First-quarter nonfinancial profits rose 1.4 percent after rising 2.6 percent, and financial profits rose 5.7 percent after rising 7.0 percent. Profits from the rest of the world fell 11.8 percent after declining 9.2 percent.

The first-quarter decline reflected a 2.2 percent drop in receipts from abroad and a 15.9 percent rise in payments to entities abroad.

To learn more about gross domestic product, read the full report.

Personal Income in States Grows

State personal income growth accelerated to 0.8 percent in the first quarter of 2012, from 0.4 percent in the fourth quarter of 2011. Personal income rose in 47 of the 50 states, fell in Kansas and Mississippi, and was unchanged in Oklahoma. The percent change across states ranged from 2.3 percent in North Dakota to –0.3 percent in Mississippi. Inflation, as measured by the national price index for personal consumption expenditures, increased to 0.6 percent in the first quarter of 2012 from 0.3 percent in the fourth quarter of 2011.

state personal income map

State personal income

For more information about state personal income, read the full report.

Value of Foreign Investment in the U.S. Increased More than Value of U.S. Investment Abroad in 2011

The U.S. net international investment position at yearend 2011 was –$4,030.3 billion (preliminary), as the value of foreign investment in the United States exceeded the value of U.S. investment abroad. At yearend 2010, the U.S. net international investment position was –$2,473.6 billion (revised).

Increases in the prices of U.S. Treasury bonds and declines in foreign stock prices raised the value of foreign investment in the United States and lowered the value of U.S. investment abroad.

The impact of changes in U.S. and foreign asset prices of –$802.1 billion accounted for over half of the –$1.6 trillion change in the U.S. net international investment position.

Most of the rest of the change in the U.S. net international investment position reflected foreign acquisitions of U.S. assets (including over $400 billion in U.S. Treasury securities) that exceeded U.S. acquisitions of foreign assets. U.S. acquisitions of foreign assets were reduced by an unusual decline in U.S. claims on foreigners as reported by U.S. banks and securities brokers.

The appreciation of the U.S. dollar against a trade-weighted index of major currencies caused a change of –$23.0 billion in the U.S. net international investment position.

The U.S. net international investment position was equal to 2.6 percent of the value of all U.S. financial assets at the end of 2011, up from 1.6 percent in 2010 and up from the recent peak of 2.3 percent in 2008.

To learn more about the U.S. international investment position read the full report.

New Global Guidelines Offer ‘How To’ for More Consistent and Reliable Data

Globalization, the financial crisis, the Great Recession, and Europe’s fiscal problems underscore just how important it is for countries to produce timely, accurate, and consistent data. Information on real gross domestic product, inflation, balance sheets, and international trade are essential to assessing cross-country effects and coordinating effective monetary, fiscal, regulatory, and trade policies. That’s why it is so valuable to have these key pieces of data put together in a more consistent manner, making it easier to compare what’s going on in one country to another, or within a given country across industries, or over time.

Wall Street traders and corporate executives—many of whom do business around the globe—rely on transparent and consistent data to make investing, hiring, and other decisions. In recent years, though, as uncertainty and the stakes on getting it right have increased, discrepancies among different economic indicators have become more of a problem to private—and public—decisionmakers. And that’s driven home the critical need for consistency between short-term indicators as well as macroeconomic measures on the state of a country’s economy. This information is especially valuable when a country may be on the verge of a turning point—such as sliding into recession or launching into a recovery.

The United Nation’s new Guidelines on Integrated Economic Statistics is a comprehensive “soup-to-nuts” handbook on making economic statistics not only more consistent but more efficient. The guidelines cover a range of topics including basic standards and methods, questionnaire design, consistent business registers and sample frames, standard classification systems, uses of survey and administrative data, and effective dissemination and communication strategies. Readers also are directed to case studies, more detailed international manuals, and guidelines in each of these areas.

For a link to the U.N. Guidelines, which is the product of an international working group chaired by BEA Director Steve Landefeld, go to unstats.un.org/unsd/nationalaccount/ies/.


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