Prescott Real Estate News Blog's purpose is to keep current, past, and potential clients apprised of the real estate market conditions for the Prescott, Arizona Area. National and state news and events will be posted but special emphasis will be placed on Prescott Area and the Yavapai County - Prescott, Prescott Valley, Chino Valley, Dewey and Kirkland/Skull Valley.
-Prescott Real Estate News
Consumers have money to spend, but are keeping a tight grip on it. That was last week's word from the Bureau of Economic Analysis, which reported that personal income for August increased just 0.5 percent over July to $59.3 billion, and disposable personal income (DPI) increased $52.0 billion, or 0.5 percent, as well. Personal consumption expenditures (PCE) increased by $41.3 billion, or 0.4 percent, over July.
"Real" DPI (i.e., after taxes) was up 0.2 in August, which marked a turnaround from July's 0.2 percent decline. Similarly, real PCE was up 0.2 percent.
With income outstripping spending, personal savings (DPI minus personal outlays) was up $661.9 billion in August, compared with July's $650.0 billion, putting personal savings as a percentage of disposable personal income at 5.8 percent in August, compared with 5.7 percent in July.
An instinct to save is definitely in line with the Conference Board's report last week that consumer confidence is dipping. The Conference Board's Consumer Confidence Index retreated in September to 48.5 (the 1985 baseline is 100), down from 53.2 in August. September's Present Situation Index, how consumers feel about their current financial circumstances, decreased to 23.1 from 24.9. The Expectations Index, how consumers feel about the economy's future, declined to 65.4 from 72.0 last month.
"September's pull-back in confidence was due to less favorable business and labor market conditions, coupled with a more pessimistic short-term outlook," said Lynn Franco, director of the Conference Board Consumer Research Center. "Overall, consumers' confidence in the state of the economy remains quite grim. And, with so few expecting conditions to improve in the near term, the pace of economic growth is not likely to pick up in the coming months."
Consumers' assessment of current conditions also worsened in September with those saying business conditions are "bad" increasing to 46.1 percent from 42.3 percent, and those claiming business conditions are "good" declining from 8.4 percent to 8.1 percent. Those claiming jobs are "hard to get" rose to 46.1 percent from 45.5 percent, while those stating jobs are "plentiful" decreased to 3.8 percent from 4 percent.
Construction spending rounded out last week's headlines with not unexpected news of declines in August. Spending on private construction was at a seasonally adjusted annual rate of $498.2 billion, down 0.9 percent from July's revised estimate of $502.6 billion. August's residential construction was at a seasonally adjusted annual rate of $238.5 billion, down 0.3 percent from the revised July estimate of $239.1 billion.
Early this week look for news on factory orders and inventories (October 4) from the Census Bureau, but the big news will come later in the week when the Federal Reserve releases its monthly report on consumer credit (October 7). The Bureau of Labor Statistics will provide data on non-farm payrolls (October 8), hourly earnings (October 8) and the average workweek (October 8).
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