NBC Economics and Strategy report that U.S. nominal personal income rose 0.4% in July, double expectations, while spending increased 0.2% and real disposable income climbed 0.4% with flat real spending. They expect August nonfarm payrolls to rise by about 80K, keeping unemployment at 4.1% as participation edges up, and note PCE inflation holding at 3.7% headline and 3.3% core.<\/p>\n
Income, jobs and PCE inflation<\/p>\n
“After advancing 0.2% in June, nominal personal income rose 0.4% in the United States in July, surpassing the median economist forecast calling for a +0.2% print. Nominal personal spending, for its part, grew 0.2% in the month, led by a 0.6% gain in the services sector. After adjusting for inflation, disposable income rose 0.4%, while spending was flat.”<\/p>\n
“Still in the U.S., the headline PCE deflator in July printed at 3.7% on a 12-month basis, unchanged from the prior month and one tick above consensus expectations (3.6%). The 12-month core measures also stayed unchanged, at a consensus-matching 3.3%. On a monthly basis, both the headline and the ex-food and energy indices moved up 0.2%.”<\/p>\n
“In the U.S., the release of the August nonfarm payroll<\/a> figures is expected to attract considerable attention. Based on the decent weekly data released by ADP and previously published \u201csoft\u201d employment indicators, such as S&P Global’s flash composite PMI, job creation likely rebounded in the month. Layoffs, for their part, may have remained very limited, judging by the extremely low number of initial jobless claims<\/a>.”<\/p>\n “These two factors combined should, in our view, result in an increase of 80K in nonfarm payrolls. The household survey could also show a healthy gain which should, however, leave the unemployment rate unchanged at 4.1% if, as we anticipate, the labour force participation rate rose by one-tenth to 61.5%.”<\/p>\n