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Americans are Earning More, and Spending More

Americans have more personal income but their expenses keep rising, according to new numbers from…

  • March 20, 2020

Americans have more personal income but their expenses keep rising, according to new numbers from the Bureau of Economic Analysis.

Personal income increased $116.5 billion (0.6 percent) in January according to estimates released by the Bureau. Disposable personal income (DPI) increased $101.4 billion (0.6 percent) and personal consumption expenditures (PCE) increased $29.6 billion (0.2 percent).

Real DPI increased 0.5 percent in January and Real PCE increased 0.1 percent. The PCE price index increased 0.1 percent.

Excluding food and energy, the PCE price index increased 0.1 percent.

The increase in personal income in January primarily reflected increases in compensation of employees and social security benefit payments (related to annual cost of living adjustments), and other government social benefits to persons, which includes the Affordable Care Act refundable tax credit.

The $12.9 billion increase in real PCE in January reflected increases of $2.2 billion in spending for goods and $10.3 billion in spending for services.

Within goods, new motor vehicles was the leading contributor to the increase. Within services, the largest contributor to the increase was spending for food services and accommodations.

Detailed information on monthly real PCE spending can be found on Table 2.3.6U.

Personal outlays increased $27.0 billion in January (table 3). Personal saving was $1.33 trillion in January, and the personal saving rate, personal saving as a percentage of disposable personal income, was 7.9 percent.