U.S. Personal Income increased only 14 billion in July 2013, the Bureau of Economic Analysis reported today (August 30 2013). That indicator had been adding higher amounts during the last four months of the current year. On average, Personal Income had increased 32.9 billion each month since sequestration started in March 2013. Accordingly to the Department of Commerce, revisited data from June confirmed that Personal Income added 38.2 billion, while in May and March it added over 45 billion each month. June was confirmed of having had an important increase of 34 billion on top of May’s figure of 17.5 billion.
The breaks in growth of Personal Income were put mainly by a slowdown of compensation given to employees, whom were paid 21.9 billion dollars less than the previous month (June). Comparing July’s data to June’s, private sector industries compensated employees with 15.3 billion less money. Furthermore, services sector firms drastically reduced remuneration to employees by 11.2 billion. Compensation to employees is mainly income received as remuneration for work.
Among the factors that pulled PI up was Proprietor’s Income, which added 7.4 billion on July. Such income refers to current-production of proprietors and partnerships. Personal Income Receipts on Assets also pushed Personal Income up, and it registered an estimated addition of 13.3 billion. PI receipts on assets comprises income received mainly from monetary interest and imputed interests.
Public sector contribution to the modest Personal Income increase stems mainly from a little growth in social transfers and furloughs. Due to furloughs and cuts, Personal Income derived from government compensation for work was reduced in 6.4 billion. Transfers from the government added only 4.4 billion. In April 2013, transfers from government did suffer 15.4 billion cuts.
Finally, supplements to wages and salaries -such as employer’s contribution for pensions- were invariable from June to July 2013.
Categories: Macroeconomics
