Personal Income: December 2012 Preview

Personal income in December is expected to rise 0.3% on a seasonally adjusted monthly basis in nominal terms, according to The Capital Spectator’s average econometric forecast.That compares with a 0.6% gain in the previous report. The average projection for December is substantially lower than the predictions in three consensus forecasts via surveys of economists.


Here’s a closer look at the numbers, followed by brief summaries of the methodologies behind The Capital Spectator’s projections:
013013AA.GIF
VAR-1: A vector autoregression model that analyzes the history of personal consumption expenditures in context with US personal income. The forecasts are run in R with the “vars” package.
VAR-3: A vector autoregression model that analyzes three economic time series in context with personal income. The three additional series: US private payrolls, personal consumption expenditures, and industrial production. The forecasts are run in R with the “vars” package.
ARIMA: An autoregressive integrated moving average model that analyzes the historical record of personal income in R via the “forecast” package to project future values.
ES: An exponential smoothing model that analyzes the historical record of personal income in R via the “forecast” package to project future values.
R-1: A linear regression model that analyzes the historical record of personal income in context with US private payrolls. The historical relationship between the variables is applied to the more recently updated payrolls data to project personal income. The computations are run in R.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>