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Tuesday, January 8, 2013

November 2012 Personal Income and Outlays, Retail Sales and Consumer Debt

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Bureau of Economic Analysis data showed that personal income increased $85.8 billion (0.6 percent) and disposable personal income (DPI) rose $74.7 billion (0.6 percent) in November. Personal consumption expenditures (PCE) advanced $41.3 billion (0.4 percent). Real (inflation-adjusted) DPI increased 0.8 percent while real PCE increased 0.6 percent.
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Although aggregate personal income continues to set new highs on a nominal basis, in inflation-adjusted terms it only finally exceeded the previous peak in November. Taking population growth into account makes the picture even gloomier; per-capita real personal income has recouped less than two-thirds of the prior peak-to-trough loss. It remains to be seen whether November’s jump upward can be sustained or trends lower in the fashion of 2011.

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The Census Bureau reported that consumers increased retail spending during November by 0.3 percent (seasonally adjusted); greater auto sales and online purchases overcame the drag from gas stations. On an unadjusted basis, sales rose 2.5 percent between October and November, led by general merchandise stores.

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Total consumer debt outstanding rose by a seasonally adjusted $16.045 billion (7.0 percent annualized) in November. Revolving (mostly credit card) debt increased by $0.8 billion (1.1 percent annualized), while non-revolving debt (mainly student and auto loans) increased by $15.2 billion (9.6 percent annualized). Federal student loans comprised nearly two-thirds of the increase in non-revolving debt, and over one-quarter of the increase in total debt outstanding.

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The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

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