The Commerce Department was out Friday morning with its most current estimates of consumer spending and income, and while the numbers were at least in positive territory, they were obliterated by the impact of inflation.
The Bureau of Economic Analysis said personal income increased $20.1 billion, or 0.2%, and disposable personal income (DPI) increased $23.4 billion, or 0.2%, in April. Likewise, personal consumption expenditures(PCE) increased $21.4 billion, or 0.2%. The BEA also released its revised esitmates for March, in which it said personal income increased $44.7 billion, or 0.4%, DPI increased $35.4 billion, or 0.3%, and PCE increased$41.7 billion, or 0.4%.
When the three measures are indexed for inflation, however, they all decreased, although the decrease was less than 0.1%. The price index for PCE increased 0.2% in April, compared with an increase of 0.3% in March.Prices, excluding food and energy, increased 0.1%, compared with an increase of 0.2% in March.
The impact of rising prices on consumer spending is likely to be exacerbated in May by the skyrocketing price of gasoline and in future months by price increases by makers of goods that are used in the manufacture of finished goods. Just this week, Dow Chemical Co., which makes products that are used in the manufacture of everything from shampoo bottles to automobiles to foodstuffs, announced it would be raising prices by as much as 20% across its entire line of products.
Meantime, wages were retreating in April.
The BEA said private wage and salary disbursements decreased $18.2 billion in April, in contrast to an increase of $26.9 billion in March, which was inflated by bonus payments. Goods-producing industries' payrolls decreased $11.4 billion, compared to an increase of $4.5 billion in March; manufacturing payrolls decreased $5.1 billion, in contrast to an increase of$2.5 billion, also in March. Services-producing industries' payrolls decreased $6.8 billion, versus an increase of $22.4 billion in March. Government wage and salary disbursements increased $3.7 billion, compared with an increase of $3.4 billion in March.