News Release
Personal Income and Outlays, August 2008
August 2008
PERSONAL INCOME AND OUTLAYS: AUGUST 2008
Personal income increased $61.5 billion, or 0.5 percent, and disposable personal income (DPI)
decreased $93.3 billion, or 0.9 percent, in August, according to the Bureau of Economic Analysis.
Personal consumption expenditures (PCE) increased $3.9 billion, or less than 0.1 percent. In July,
personal income decreased $69.0 billion, or 0.6 percent, DPI decreased $91.0 billion, or 0.8 percent, and
PCE increased $14.2 billion, or 0.1 percent, based on revised estimates. The pattern of changes in
income primarily reflects the pattern of payments associated with the Economic Stimulus Act of 2008
(see page 2).
Real DPI decreased 0.9 percent in August, compared with a decrease of 1.5 percent in July. Real
PCE increased less than 0.1 percent, in contrast to a decrease of 0.5 percent.
2008
Apr. May June July Aug.
(Percent change from preceding month)
Personal income, current dollars 0.3 1.9 0.1 -0.6 0.5
Disposable personal income:
Current dollars 0.4 5.7 -1.8 -0.8 -0.9
Chained (2000) dollars 0.2 5.3 -2.5 -1.5 -0.9
Personal consumption expenditures:
Current dollars 0.3 0.7 0.5 0.1 0.0
Chained (2000) dollars 0.1 0.2 -0.2 -0.5 0.0
Beginning with April, changes in disposable personal income (DPI) -- personal income less
personal current taxes -- were affected by the Economic Stimulus Act of 2008, which authorized
the federal government to issue tax rebate payments. These payments are now winding down.
The federal government issued rebate payments of $1.9 billion in April ($23.3 billion at an
annual rate), of $48.1 billion in May ($577.1 billion at an annual rate), of $27.9 billion in June
($334.4 billion at an annual rate), of $13.7 billion in July ($164.1 billion at an annual rate), and
of $1.0 billion in August ($12.4 billion at an annual rate). These rebates increased government
social benefit payments and reduced personal current taxes. Excluding these rebate payments,
which are discussed more fully below, DPI increased $58.4 billion, or 0.5 percent, in August,
increased $79.3 billion, or 0.8 percent, in July, and increased $42.8 billion, or 0.4 percent, in June.
Wages and salaries
Private wage and salary disbursements increased $24.5 billion in August, compared with an
increase of $16.3 billion in July. Goods-producing industries' payrolls increased $5.0 billion, the
same increase as in July; manufacturing payrolls decreased $1.6 billion in August, in contrast to an
increase of $2.0 billion in July. Services-producing industries' payrolls increased $19.4 billion,
compared with an increase of $11.4 billion. Government wage and salary disbursements increased
$3.8 billion, compared with an increase of $4.0 billion.
Other personal income
Supplements to wages and increased $3.7 billion in August, compared with an increase of $3.6 billion
in July.
Proprietors' income decreased $8.7 billion in August, in contrast to an increase of $4.6 billion in
July. Farm proprietors' income decreased $6.1 billion, compared with a decrease of $2.3 billion.
Nonfarm proprietors' income decreased $2.6 billion, in contrast to an increase of $6.9 billion.
Rental income of persons increased $4.0 billion in August, compared with an increase of $3.9
billion in July. Personal income receipts on assets (personal interest income plus personal dividend
income) increased $20.2 billion, compared with an increase of $20.0 billion.
Personal current transfer receipts increased $17.4 billion in August, in contrast to a decrease of
$119.6 billion in July. The August and July changes reflected provisions of the Economic Stimulus
Act of 2008, which boosted the level of personal current transfer receipts by $5.1 billion (at an annual
rate) in August, by $4.2 billion in July, and by $149.4 billion in June. These personal current transfer
receipts reflected payments to individuals who either paid no income tax or whose payment exceeded
the amount of income tax paid (see box on page 6). The August and July changes also reflected
provisions of the Supplemental Appropriations Act of 2008, which provides up to 13 weeks of
additional unemployment compensation benefits to those who have exhausted their regular
unemployment benefits. The additional unemployment benefits boosted the level of personal current
transfer receipts by $17.6 billion in August and by $4.6 billion in July.
Contributions for government social insurance -- a subtraction in calculating personal income --
increased $3.4 billion in August, compared with an increase of $1.9 billion in July.
Personal current taxes and disposable personal income
Personal current taxes increased $154.9 billion in August, compared with an increase of $21.9
billion in July. Provisions of the Economic Stimulus Act of 2008 reduced the level of personal
current taxes by $7.3 billion (at an annual rate) in August, by $159.9 billion in July, and by $185.0
billion in June. The reductions in current personal taxes reflected rebate payments to eligible
individual taxpayers (see box on page 6).
Disposable personal income (DPI) -- personal income less personal current taxes -- decreased
$93.3 billion, or 0.9 percent, in August, compared with a decrease of $91.0 billion, or 0.8
percent, in July.
Personal outlays and personal saving
Personal outlays -- PCE, personal interest payments, and personal current transfer payments --
increased $4.0 billion in August, compared with an increase of $14.4 billion in July. PCE increased
$3.9 billion, compared with an increase of $14.2 billion.
Personal saving -- DPI less personal outlays -- was $103.6 billion in August, compared with
$201.0 billion in July. Personal saving as a percentage of disposable personal income was 1.0
percent in August, compared with 1.9 percent in July. Saving from current income may be near zero
or negative when outlays are financed by borrowing (including borrowing financed through credit
cards or home equity loans), by selling investments or other assets, or by using savings from previous
periods. For more information, see the FAQs on "Personal Saving" on BEA's Web site. For a
comparison of personal saving in BEA's national income and product accounts with personal saving
in the Federal Reserve Board's flow of funds accounts, go to /bea/dn/nipaweb/Nipa-Frb.asp.
Real DPI and real PCE
Real DPI -- DPI adjusted to remove price changes -- decreased 0.9 percent in August, compared with
a decrease of 1.5 percent in July.
Real PCE -- PCE adjusted to remove price changes -- increased less than 0.1 percent in August,
in contrast to a decrease of 0.5 percent in July. Purchases of durable goods increased 1.6
percent, in contrast to a decrease of 3.2 percent. Purchases of motor vehicles and parts more than
accounted for the increase in August and accounted for most of the decrease in July. Purchases of
nondurable goods decreased 0.3 percent in August, compared with a decrease of 0.7 percent in July.
Purchases of services decreased 0.1 percent, in contrast to an increase of 0.1 percent.
PCE price index -- The price index for PCE increased less than 0.1 percent in August, compared
with an increase of 0.6 percent in July. The PCE price index, excluding food and energy,
increased 0.2 percent, compared with an increase of 0.3 percent.
Revisions
Estimates have been revised for April through July. Changes in personal income, current-
dollar and chained (2000) dollar DPI, and current-dollar and chained (2000) dollar PCE for June and
July -- revised and as published in last month's release -- are shown below.
Change from preceding month
June July
Previous Revised Previous Revised Previous Revised Previous Revised
(Billions of dollars) (Percent) (Billions of dollars) (Percent)
Personal Income:
Current dollars...................... 7.4 16.2 0.1 0.1 -89.9 -69.0 -0.7 -0.6
Disposable personal income:
Current dollars...................... -208.0 -199.9 -1.9 -1.8 -114.7 -91.0 -1.1 -0.8
Chained (2000) dollars............... -237.7 -232.7 -2.6 -2.5 -149.2 -130.5 -1.7 -1.5
Personal consumption expenditures:
Current dollars...................... 65.5 52.2 0.6 0.5 24.1 14.2 0.2 0.1
Chained (2000) dollars............... -8.3 -20.7 -0.1 -0.2 -33.0 -41.4 -0.4 -0.5
Economic Stimulus Act of 2008
The Economic Stimulus Act of 2008 provides rebate payments to eligible individual taxpayers as
well as tax reductions for businesses. For individuals, the amount of the rebate is determined by
information reported on tax filings for 2007 and is based on filing status, level of adjusted gross income,
and the number of qualifying children. According to the Joint Committee on Taxation and the
Congressional Budget Office, rebates to individuals are expected to total $106.7 billion for fiscal year
2008. The majority of rebates were sent during the initial round of payments, which began April 28,
2008, and continued on a weekly basis through mid-July 2008.
In the NIPAs, rebates for residents of the 50 states and the District of Columbia are recorded as
either an offset to personal current taxes or as a social benefit payment to persons. Rebates for
individuals with tax liabilities that exceed the rebate amount are treated as an offset to personal current
taxes in the NIPAs. Rebates for individuals who pay no income taxes (or for whom the rebate would
exceed the amount of the income taxes they do pay) are treated as a government social benefit payment to
persons in the NIPAs.
BEA's national, international, regional, and industry estimates; the Survey of Current
Business; and BEA news releases are available without charge on BEA's Web site at www.bea.gov.
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Next release -- October 31, 2008, at 8:30 A.M. EDT for Personal Income and Outlays for September.