December 23, 2020
In November, personal income fell $221.8 billion (1.1%) in the U.S, according to estimates released by the Bureau of Economic Analysis. Disposable personal income (DPI) declined $218.0 billion (1.2%) and personal consumption expenditures (PCE) fell $63.3 billion (0.4%).
Real DPI decline 1.3% in November, and Real PCE fell 0.4%. The PCE price index remained unchanged. The PCE price index less food and energy remained unchanged.
The decline in personal income in November was primarily attributed to the decreases in proprietors’ income and government social benefits that were partly offset by a rise in compensation. Moreover, according to BEA, “within nonfarm proprietors’ income, the decrease reflected a decline in Paycheck Protection Program loans to businesses. The decrease in farm proprietors’ income reflected a decrease in payments under the Coronavirus Food Assistance Program related to supporting farmers and ranchers impacted by COVID-19 as well as a decline in Paycheck Protection Program loans to businesses. Within government social benefits, “other” social benefits decreased, which primarily reflected a decrease in Lost Wages Supplemental Payments, a Federal Emergency Management Agency program that provides wage assistance to individuals impacted by the pandemic. Within compensation, the main contributor was an increase in wages and salaries in service-producing industries.”
In November, the real PCE fell by $53.7 billion, revealing a $53.7 billion decrease in spending for goods and a $12.1 billion decrease in spending on services. Within goods, spending on clothing and footwear and motor vehicles and parts were the main contributor to the decline. Notably, this was offset by an increase in spending for food and beverages purchased for offpremises consumption. Within services, the leading contributors to the decrease were spending on food services and accommodations as well as in household utilities (electricity and gas).
Personal outlays fell $66.8 billion in November while personal saving was $2.22 trillion, and the personal saving rate, personal saving as a percentage of disposable personal income, stood at 12.9%.
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