Personal income in February 2011 rose 0.3%. Nominal personal consumption expenditures (PCE) increased 0.7% while real PCE rose 0.3%. Nominal disposable personal income (DPI) increased 0.3% while real DPI fell 0.1%. The personal saving rate as a percentage of DPI was 5.8% in February.
First and foremost, income drives consumer spending; that’s why the Commerce Department’s Bureau of Economic Analysis monthly release of income receives so much attention. Today’s release showed that income increased 0.3 percent and the gains in January and February were revised upward (January’s report initially showed a 1.0 percent leap and is now estimated to have increased by 1.2 percent, and December’s gain was revised from 0.4 percent to 0.5 percent -- we’ll talk more about revisions to several economic series later in the week). Recall that January’s outsized gain was driven largely by the lower tax withholdin
Personal income in January 2011 rose 1.0 percent. Nominal personal consumption expenditures (PCE) increased 0.2 percent, while real PCE declined 0.1 percent. Nominal disposable personal income (DPI) rose 0.7 percent while real DPI increased 0.4 percent. The personal saving rate as a percentage of DPI was 5.8 percent in January.
Today’s release covers personal income and consumer spending for the month of January. The big news is on the income side where personal income increased 1.0 percent in January -- the largest increase since May 2009 and substantially higher than private expectations of 0.4 percent. Why did income go up so much? The bottom line is that income was substantially boosted by the tax cuts the President signed in December. More specifically, the jump in income in January from December was driven by the reduction in the withholding rate for social security from 6.2 to 4.2 percent. Wages and salaries, the largest component of income, rose a modest
Personal income in December 2010 rose 0.4 percent. Nominal personal consumption expenditures (PCE) increased 0.7 percent and real PCE rose 0.4 percent. Nominal disposable income (DPI) increased 0.4 percent and real DPI rose 0.1 percent. The personal savings rate as a percentage of DPI was 5.3 percent.
