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Last Update: 30-Nov-12 08:52 ET
Personal Income and Spending Fall as Hurricane Sandy Batters the East Coast
Personal income growth was flat in October after increasing 0.4% in September. The Briefing.com consensus expected income to increase 0.2%. According to the BEA, Hurricane Sandy reduced wages by roughly $18.0 annualized in October. Absent the effects of the hurricane, income would have risen 0.1%. That is still below the consensus, but is in-line with the aggregate wage data reported in the October Employment Situation Report. That report was unaffected by the hurricane. After increasing a sizable 0.8% in September, personal spending fell 0.2% in October. The consensus expected spending to increase 0.1%. The drop in spending should not have been unexpected as it mirrors the weakness reported in the October retail sales report. The effects of the hurricane cannot be teased out of the data, but a rebound in spending is likely to occur in November as consumers buy goods that they were unable to purchase during the hurricane. Durable goods spending fell 1.9%, largely related to a sharp drop in motor vehicle sales. Nondurable goods demand fell 0.2% and services spending rose 0.1%.
