Week In Review
Personal income rose 0.5% in November while personal consumption increased 0.4%.
This month’s income rise was better than expected. More cash in consumers’ pockets is a positive data point, especially in light of the recent weak retail sales report. The consumer continues to drive U.S. economic growth.
Alaskan Governor Mike Dunleavy’s recent budget proposal relies on using savings and reserve funds as the state continues to struggle with lower than expected oil revenue. Also included in the proposal are plans for future budgets, which outline several scenarios including cutting costs, new taxes and changes to the permanent fund dividend calculation.
Alaska has struggled financially in recent years since the drop in oil prices led to decreased revenue for the state. Lawmakers face the prospect of continued low oil prices and lower revenue as next year’s budget takes shape. Using reserve funds should be viewed as a short-term solution. Governor Dunleavy and Alaskan lawmakers will have plenty of work to accomplish as they look ahead to long-term budget planning.