The personal income and spending report are generated by the Bureau of Economic Analysis to track income level and spending by United States consumers. The personal gain is the total value of earnings from all sources by U.S. individuals while spending is purchases of both durable and non-durable goods and services. The personal income and spending report indicate saving activity, overall economic stability and consumer behaviour.
The first half of the report track down the income level of U.S. individuals from all sources including interest payments, dividend income, rental income and as well as income from non-payroll sources; at the same time, the second half expresses the behaviour of consumer spending across the three main categories, durable goods, non-durable goods and services.
The traders and investors use the 1st half of the report as an indicator to measure spending in various industries. It is reflected as a feasible tool for market analysis, even though it has one major downside that report doesn’t reveal whether or not individuals plan to spend or save increased income. At the same time, the second part of the information is considered more valuable for defining the prospects for growth in different sectors due to increased spending.
As a monetary indicator, the personal income and spending help to measure the strength of the United States consumer sector, because income level and spending indicate overall aggregate demand for goods and services. The report also helps investors because it analysis consumer spending in durable, non-durable goods and services.
An increase in income level and consumer spending is supposed to lead price inflation and wage, which could hurt the bond market. A more than expected growth in personal income and expenditure usually cause the price of bonds to rise and interest rate to rise.
According to the report of the Bureau of Economic Analysis, the personal income and spending in September 2019 indicate that personal income rose to 0.3%, income after taxes rose to 0.3% and consumer spending was up to 0.2%.