US: Personal income and spending data in the limelight – Nomura

Analysts at Nomura expect a trend-like increase in US personal income of 0.3% m-o-m in August, after July’s 0.4% rebound.

Key Quotes

“The underlying pace of income growth has been steady during 2017 and aggregate earnings in August increased steadily in the BLS employment report.”

“For spending, we expect a 0.1% increase in August, a slight deceleration from the 0.3% increase in July. Incoming retail sales data have been weaker than expected. Motor vehicles and parts sales declined in August, likely reflecting at least in part some weakness caused by Hurricane Harvey in the Greater Houston area. Electronics and appliance store sales were weak for the fourth month in a row in August. However, healthy increases in non-durable goods spending should offset weakness from durables. Moreover, services spending likely increased. While utility consumption most likely declined over the month, partially reflecting unseasonably cool weather in the northeast, healthy sales at dining & drinking places and other services spending likely counteracted the weakness in utilities.”