Errata to Personal Income and Outlays

The Bureau of Economic Analysis(BEA) reports that its estimates of personal income for March and for the first quarter of 2006, which were released on May 1, 2006 were overstated. Personal income for March is now estimated to have increased $49.9 billion (annual rate), or 0.5 percent (not annualized). For the first quarter, personal income growth is now estimated to have increased by $157.8 billion, or 6.2 percent (annual rate).

This overstatement of income resulted from including in the March estimate of Government social benefits to persons a prepayment for April for Medicare Part D benefits—the new prescription drug plan that began on January 1. Personal income for March was overstated by $38.9 billion (annual rate), and its growth was overstated by 0.3 percentage point (not annualized); first-quarter personal income was overstated by $12.9 billion, and its growth was overstated by 0.5 percentage point (annual rate). In the Monthly Treasury Statement—BEA’s data source for payments for the Medicare Prescription Drug Plan—the payment for the month of April, which would normally be made on the first day of the month, was made on March 31 because April 1 fell on a Saturday. According to BEA’s standard practice for recording government transactions, this prepayment should have been recorded in April.

Corrected estimates of personal income for March and for the first quarter are now available on BEA’s Web site at http://www.bea.gov/bea/dn/nipaweb/SelectTable.asp?Selected=N. The corrections impact the personal income and government social benefits within the following National Income and Product Account tables: 1.7.5, 2.1, 2.6, 3.1, 3.2, 3.12U, 5.1 and 7.1. Gross domestic product was not affected.

Contact: Ralph Stewart 202-606-2649
Bureau of Economic Analysis, U.S. Department of Commerce

Updated May 4, 2006