Economy Watch: Employment Markets Tighter, Incomes Up
- Dec 01, 2016
Ahead of Friday’s report on employment for November, other recent reports are pointing to a stronger economy, and a probable interest rate hike in December. The Beige Book reported a stronger employment picture; the Bureau of Economic Analysis reported that personal income is up; and the New York Fed said that household debt isn’t up much. All that’s a recipe for stronger consumer spending, and thus a stronger economy.
The latest Beige Book, released by the Federal Reserve on Wednesday, noted that “a tightening in labor market conditions was reported by seven Districts, with modest employment growth on balance,” which generally means higher incomes on balance.
And that’s what the Bureau of Economic Analysis reported on Wednesday as well. Personal income increased $98.6 billion (0.6 percent) in October, while disposable personal income also increased 0.6 percent and personal consumption expenditures (PCE, or people spending some of that disposable personal income) was up 0.3 percent.
Meanwhile, the burden of household debt wasn’t much worse in the third quarter, according to the New York Fed. Total household debt increased modestly by $63 billion (up 0.5 percent) to $12.35 trillion during third-quarter 2016. There were increases across every type of non-housing debt, with a 2.9 percent increase in auto loan balances; a 2.5 percent increase in credit card balances and a 1.6 percent increase in student loan balances during the quarter.