For the first two months of 2017, personal income rose 0.4 percent in a sign that consumers are earning more. On Monday, The Bureau of Economic Analysis will release its Personal Income and Outlays report and many analysts are predicting an increase of 0.3 percent, which would be faintly smaller than previous months.
Here are five things to look out for in March’s report.
No Change in Hours Worked
Strong economic activity has allowed American workers to put in more hours at their jobs. The Bureau of Labor Statistics released their numbers for March 2017 and Americans worked an average of 34.3 hours, which is in line with the year-over-year average.
Wages and Salary
Nineteen states increased their minimum wage in 2017, which means working Americans are earning more in wages and salary. While there have seen slight increases in their paychecks, earning upward to 5 cents more per hour, there may be a slight drop off once figures are released on Monday, due in part to the U.S. economy only adding 98,000 jobs in March, which was much lower than many economists predicted.
Under President Trump, the GDP only grew by 0.7 percent for the first three months of the year, according to the Commerce Department. This is significantly lower than the 2.1 percent increase recorded during the first quarter of 2016 and a slight blow for the president within his first 100 days in office. While the increase was lower than expected, analysts believe that it is only temporary and that there will be evident increases for the remainder of the year.
Durable Goods Takes a Hit
U.S. Consumers have taken a cautionary approach and are forgoing purchasing big ticket items like automobiles, which saw a lull in March sales. Americans are spending less on durable goods, which is indicative of consumers not being as confident in the economy as previously reported.
“As long as auto sales generally move sideways then I’d say that’s consistent with the healthy consumer,” said Michael Gapen, economist at Barclays Capital Inc. “Households don’t buy cars and homes, unless they are pretty comfortable with income and employment.”
More consumers are likely to have gotten their tax refunds last month, after a delay by the government over fraudulent claims. Consumers getting their tax refunds means that they are likely to purchase non-durable goods, plan vacations now that children will be out of school for the summer, or save their refunds because of their lack in confidence in the U.S. economy. Personal Consumption Expenditures, which saw a 0.1 percent increase in February, may likely see an increase for March. This further indicates that more Americans will save their earnings rather than invest back into the U.S. economy.