The Bureau of Economic Analysis (BEA) has released its reading on personal income and outlays (spending) for the month of December. Some of the data may have been seen in last week’s first look at the fourth-quarter gross domestic product (GDP) release.
Personal income rose 0.3% in December. This met the Bloomberg consensus, and the Econoday range of estimates was 0.0% to 0.5% for the month. In real dollar terms, personal income increased by $42.5 billion and disposable personal income increased $37.8 billion.
Outlays, the measure of consumer spending, was more or less flat with a 0.0% reading. Bloomberg’s consensus estimate was for spending to be up 0.1% and the Econoday range was 0.0% to 0.5%. In real dollar terms, the personal consumption expenditures decreased by $0.7 billion.
In November’s revised data, personal income increased $44.3 billion, disposable personal income increased $33.4 billion, and personal consumption expenditures increased $59.4 billion.
What seems to be happening is that consumers are becoming more and more frugal. We saw a boost in the personal savings rate in the GDP report last week, so that savings rate may overweight the argument that people are buying close to the same goods but at slightly more of a bargain price.
Wages and salaries increased $13.1 billion in December, compared with an increase of $37.9 billion in November. Private wages and salaries increased $10.3 billion, compared with an increase of $35.3 billion. Government wages and salaries increased $2.8 billion, compared with an increase of $2.6 billion. Additional data from the BEA was as follows:
- Proprietors’ income increased $13.4 billion in December, in contrast to a decrease of $1.9 billion in November.
- Farm proprietors’ income decreased $0.3 billion, the same decrease as in November.
- Rental income of persons increased $3.3 billion in December, versus an increase of $2.7 billion in November.
- Personal income receipts on assets (personal interest income plus personal dividend income) decreased $8.8 billion, compared with a decrease of $5.4 billion.
- Personal current transfer receipts increased $18.1 billion in December, compared with an increase of $9.4 billion in November. Within current transfer receipts , government social benefit payments to persons included retroactive Social Security benefit payments of $8.8 billion (at an annual rate), resulting from a recalculation of the earnings base underlying the benefits of recent retirees.
- Personal current taxes increased $4.8 billion in December, compared with an increase of $10.9 billion in November.
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