On monday, the Bureau of Economics Analysis will produce its monthly report on Personal Income and Outlays for the months of February and March.

Economist do not believe many of the numbers in this report should be too surprising. A lot of the same economic figures have already shown up in the retail sales and GDP reports that have each come out earlier this month. Here are five things to pay attention to when reading the report.

Rebound in Spending

After a slow economic start to the year, economist are expecting a spending rebound in the second quarter, which is reflected in positive numbers in the retail sales report that came out earlier this month.

The personal savings rate is predicted to go down along with the big increase in spending, but numbers are still expected to be strong. The savings rate shot up to 7.7 percent in December and only decreased to 7.5 in January. The savings rate doesn’t see too much fluctuation from month to month, but a rate that remains high is a good sign for the economy.

Individuals have been able to hold onto the money and spend it where they need. Now that some of the economic uncertainty of the first few months of this year have passed, Americans are feeling more comfortable going out and spending that money.

Auto Sales Bounce Back

“In consumer spending the main weakness was in durables,” said David Sloan, senior economist at Continuum Economics.

Auto sales fall under the durable goods category in the personal income report, which has seen very discouraging numbers through the beginning of the year. Durable goods saw a decrease of 2.9 percent in December and another decrease of 1.2 percent in January.

Auto sales picked up in February and March, and economists expect to see a good showing in this months report.

The numbers might be slightly lower than in the retail sales report because personal income report doesn’t account for sales of used cars.

Strong Service Sector

Economists predict that the increased spending will show positively in the service sector. Other indicators have shown strong job growth in retail markets which should translate into increased spending.

Robert Brusca, chief economist at Fact and Opinion, said that a good indicator of what job growth is doing is to look at how service spending is performing, “because that’s where the jobs are.”

He said strong services can allow you to pencil in good job growth, but if the “services number starts to get wimpy then you have to worry about job growth.”


The main thing economist are looking at in this report is the state of inflation. Last month’s report saw an 1.8 percent increase year over year, which is just below the Fed’s desired 2 percent rate.

Robert Brusca said, the Fed has been moving rates up steadily almost relentlessly. “If we don’t see inflation, we won’t see raised rates.”

The Fed has been under watch ever since President Trump made his frustrations with the Fed’s Chair Jerome Powell very public, asking whether or not he has the authority to fire Powell for continually raising interest rates.

But inflation is predicted to continue fall short of the Fed’s desired target, and even expected to fall further. Ryan Sweet, director of real-time economics at Moody’s Analytics, predicts a decrease to 1.5 percent year over year by the end of 2019.

Tax Season Not Having Much Effect

Early indicators of tax refunds were showing significant decreases in the amount Americans were getting on returns. But as the months have played out, numbers have shown that refunds are only marginally smaller that they were last year.

The numbers make sense when you factor in that most of the money lost in refunds was felt in slightly higher paychecks throughout the year.

One side effect of deflated refunds might be seen with regard to higher earning households. Most of the top earners wait till the end of the tax season to file. Ryan Sweet says high end retailers might suffer from a lack of big money spending from the wealthiest Americans.