US: Personal income and spending data to be steady - Nomura

In February, research team at Nomura expects a steady 0.4% m-o-m increase in US personal income (Consensus: 0.4%) as private production and nonsupervisory jobs increased steadily and the average weekly earnings of those at these positions continued to increase, pointing to sustained increase aggregate earnings. 

Key Quotes

“As for personal spending, we expect a 0.1% m-o-m increase (Consensus: 0.2%). Although gains in employment and personal income have been steady, February retail sales were on a weak side. Retail sales of some durable goods such as motor vehicle and parts, and electronics and appliance declined. Retail sales of nondurable goods such as clothing and other general merchandise were soft as well. Much of the weakness in core retail sales was, in part, attributable to delayed tax returns, most of which was pushed off to March. Yet, incoming data suggest healthy activity in the service-providing industry. The aggregate hours worked in this sector points to steady improvement in activity.”

“Although energy-related service spending was likely weak as demand for electricity and gas utility was weak because of unusually warm weather, we expect aggregate service spending to offset some weakness in durable and nondurable good spending.”