Obi-Wan Kenobi
/ 83.5.210.* / 2010-01-29 15:58
The amusing part of the report is found in the personal income and outlays section:
Current-dollar personal income increased $119.2 billion (4.0 percent) in the fourth quarter, compared with an increase of $35.1 billion (1.2 percent) in the third.
Personal current taxes decreased $11.7 billion in the fourth quarter, in contrast to an increase of $3.5 billion in the third.
Got it? People aren't earning the money, the government is handing it out. You don't pay taxes on government handouts, for the most part. There was a potential "improvement" signal in the third quarter related to tax liabilities increasing, but that has now reversed - hard - which throws a big fat rock at the concept of employment turning in any meaningful way. Instead the "current dollar income" is being borrowed and given away by the government through unemployment extensions and other forms of handout.
Non-residential structures (commercial R/E) plummeted by 15.4% yet residential is claimed to have increased. Homebuyer tax-credit incentives? Probably.
Looking at the breakdown there are some warnings: Utility expense appears to be comparatively strong, which looks to be the lion's share of the Q4 household service change, with the rest being almost all in health care costs. This is not a good trend when an increasing percentage of personal income is comprised of government handouts.
Non-durable purchases were up significantly at bars and restaurants (normal during the 4th Quarter - look at 06 and 07) while gas and energy purchases were down in Q3 and Q4 - a not-good change considering the trajectory of prices for both (demand is decreasing significantly, as prices have been up a LOT, so if gross sales are slightly down.....)