December Personal Income Up 5.5%
According to the Bureau of Economic Analysis, December personal income reached an all-time high of $11,194 billion real dollars (seasonally adjusted at annual rate). This was an increase of 5.5% compared to December 2011. That is the largest month-over-month increase in real personal income since October 2000. The annual rate of change, currently 1.7%, is growing at its fastest rate since January 2012. The reason for the significant increase was a much higher than usual level of income from dividends and asset sales. With the expected change in the tax law for 2013, individuals pulled as much income as possible forward into 2012. So, the month-over-month rate of growth in real personal income should slow significantly, if not contract, in the first few months of 2013. This should affect the annual rate of change in the late second quarter or early third quarter of 2013.
The trend in real personal income, which you can see in the charts below, is a very positive sign for many durable goods end markets. It is one of the earliest leading indicators for the following end markets: aerospace; construction materials; custom processors; electronics, computers and telecommunications equipment; food and beverage processing; forming and fabricating (non-auto); hardware; HVAC; inudstrial motors, hydraulics and mechanical components; machinery and equipment manufacturing; metalcutting job shops; oil, gas field and mining machinery; power generation; primary metals; and printing.
blog comments powered by Disqus