Wages & Prices Continue to Climb

The good news is wages are rising at the fastest pace in decades. The bad news is inflation is rising just a little bit faster…(BEA)

  • Personal income actually fell in September by 1.0% from August but was up 3.5% year-over-year.

NOTE: Government transfers continue to decline with a big drop in September from August of 7.1% while the year-over-year decline was smaller at 6.4%.

Despite an increase in income, disposable personal income and personal savings fell in September…

  • Disposable income fell 1.4% month-over-month and was down 1.5% from the same time one year ago.
  • Personal savings fell 19.7% month-over-month and was down a whopping 46.8% from September 2020.

The bad news for Americans is inflation is currently outpacing wage gains…

  • PCE held steady with a 0.3% increase month-over-month, but the year-over-year growth increase to 4.4%.
  • Core PCE was up 0.2% month-over-month and 3.6% year-over-year.

Even with higher prices, consumers still increased in their spending which was up 0.5%month-over-month to $16.54 billion. This is also 9.7% higher when compared to the same time last year.