Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights personal income and consumer sentiment.

• Personal income and outlay data show that incomes continue to grow on a year over year basis in August though the monthly data showed a slight decline.  Personal income grew about 4.5 percent from August 2010 to August 2011.  That is the 14^th consecutive month of 4.5 percent or higher income growth.
• At the same time, personal spending grew at a rate of 4.7 percent, its 12 month of year over year growth above 4 percent.
• Price growth has taken a bigger bite out of consumer spending power.  The personal consumption expenditure price index shows an increase of 2.9 percent for prices of all expenditures over last year.  Taking out food and energy price changes, the yearly increase in prices has been only 1.7 percent, but both of these measures—with and without food and energy—are growing at nearly twice their rate of growth in late 2010.
• Consumers have eased up slightly on their savings.  In August, the aggregate savings rate was 4.5 percent, the lowest since December 2009.  In the post-recession period the savings rate has typically been 4.5 to 6 percent.
• Revised Michigan Consumer Sentiment data show a lift in attitudes from August on current conditions as well as the outlook.  While some research shows that consumer sentiment and consumer confidence are not as great at predicting consumer spending now as they were in the past, there is still a strong relationship, suggesting some improvement in spending on the horizon.

Weekly Forecast

At a glance, this table shows the forecast for some of the most pertinent weekly data for REALTORS® to keep in mind. This changes from week to week as new data becomes available. For the full forecast from the latest Pending Home Sales release, click here (PDF).