February 26, 2021
In January, personal income rose $1,954.7 billion (10%) in the U.S, according to estimates released by the Bureau of Economic Analysis. Disposable personal income (DPI) rose $1,963.2 billion (11.4%) and personal consumption expenditures (PCE) climbed $340.9 billion (2.4%).
Real DPI climbed 11.0% in January, and Real PCE rose 2.0% with goods increasing 5.1% and services increasing 0.5%. The PCE price index rose 0.3%. The PCE price index less food and energy increased 0.3%.
The rise in personal income in January was primarily attributed to the increases in government social benefits to persons as payments were made to individuals from federal COVID-19 pandemic response programs. There was also an increase in “other” social benefits, reflecting an increase in payments distributed through the CRRSA Act. BEA also noted that, “Unemployment insurance also increased, reflecting an increase in pandemic unemployment compensation, including supplemental weekly payments to unemployment beneficiaries re-introduced by the CRRSA Act.”
In January, the current dollar PCE increased by $340.9 billion which meant a $277.2 billion rise in spending for goods versus a $63.7 billion increase in spending for services. Within goods, spending on recreational goods and vehicles and food and beverages were the main contributor to the increase based on Census Monthly Retail Trade Survey (MRTS) data. Notably, within services, the leading contributors to the increase were spending on food services and accommodations. Moreover, spending for health care led by outpatient services also increased but was partly tempered by a decline in spending for housing and utilities led by electricity and gas based on data from Energy Information Administration.
Personal outlays rose $348.7 billion in January while personal saving was $3.93 trillion, and the personal saving rate, personal saving as a percentage of disposable personal income, stood at 20.5%.
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