US personal income increased by $70.7 billion

January 28, 2022

According to Bureau of Economic Analysis, personal income climbed $70.7 billion (0.3%) in December. Personal consumption expenditures (PCE) declined $95.2 billion, while disposable personal income (DPI) climbed $39.9 billion (0.2 percent) (0.6 percent). In December, the real DPI fell 0.2 percent, while the real PCE fell 1.0 percent; goods fell 3.1 percent, while services rose 0.1 percent. The PCE price index grew by 0.4 percent this month. The PCE price index grew 0.5 percent excluding food and energy.

Impact of COVID-19 on Personal Income and Expenditures in December 2021

The estimate for December personal income and outlays reflected the government’s reaction to the COVID-19 outbreak and the economy’s sustained recovery. In several sections of the nation, COVID-19 instances led to persistent limitations and interruptions in business operations in December. The government’s social benefits have diminished, owing to the end of pandemic-related aid programs. Because the consequences are often entrenched in source data and cannot be recognized individually, the entire economic implications of the COVID-19 pandemic cannot be estimated in the personal income and outlays estimate.

The rise in personal income in December was mostly due to higher remuneration, which was somewhat offset by lower owners’ income. Within pay, the rise represented wage and salary increases in both the commercial and public sectors. Both nonfarm and farm income declined among proprietors’ earnings. As a result of the winding down of pandemic-related aid programs, government social benefits have fallen marginally.

The $95.2 billion drop in current-dollar PCE in December was due to a $147.2 billion drop in goods expenditure, which was somewhat offset by a $52.0 billion gain in services spending. Recreational items and cars, “other” nondurable products (which includes newspapers, home supplies, games and toys), and furnishings and durable domestic equipment all saw drops. Spending on health care was the major contributor to the growth in services. Table 2.3.5U provides detailed statistics on monthly PCE spending.

In December, personal spending fell by $93.5 billion. Personal savings were $1.44 trillion in December, with a 7.9% personal saving rate (savings as a proportion of disposable personal income).

The PCE price index grew 5.8% from a year ago in December, indicating rises in both goods and services. Food costs jumped 5.7 percent while energy prices increased 29.9%. The PCE price index for December grew 4.9 percent from a year ago, excluding food and energy.


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