News Release
Personal Income and Outlays, February 2008
February 2008
PERSONAL INCOME AND OUTLAYS: FEBRUARY 2008
Personal income increased $56.0 billion, or 0.5 percent, and disposable personal income (DPI)
increased $48.7 billion, or 0.5 percent, in February, according to the Bureau of Economic Analysis.
Personal consumption expenditures (PCE) increased $12.0 billion, or 0.1 percent. In January, personal
income increased $30.4 billion, or 0.3 percent, DPI increased $43.7 billion, or 0.4 percent, and PCE
increased $42.0 billion, or 0.4 percent, based on revised estimates.
Real disposable income increased 0.3 percent in February, compared with an increase of 0.1
percent in January. Real PCE was unchanged in February; and increased 0.1 percent in January.
2007 2008
Oct. Nov. Dec. Jan. Feb.
(Percent change from preceding month)
Personal income, current dollars 0.2 0.3 0.4 0.3 0.5
Disposable personal income:
Current dollars 0.2 0.3 0.4 0.4 0.5
Chained (2000) dollars 0.0 -0.3 0.2 0.1 0.3
Personal consumption expenditures:
Current dollars 0.3 1.0 0.2 0.4 0.1
Chained (2000) dollars 0.1 0.3 -0.1 0.1 0.0
Compensation of employees
Private wage and salary disbursements increased $14.8 billion in February, compared with an
increase of $21.9 billion in January. The January change in private wages and salaries reflected an
adjustment of $15.0 billion (at an annual rate) for large bonus payments. This type of irregular payment
is not accounted for in the primary monthly source data for wages and salaries. The adjustment to
January wages was based on data from state governments and from other sources. (The $15.0 billion
adjustment is also reflected in the February estimate and a similar adjustment will be made to March.)
Goods-producing industries' payrolls increased $2.7 billion in February, compared with an increase of
$1.1 billion in January; manufacturing payrolls increased $2.2 billion, compared with an increase of
$1.7 billion. Services-producing industries' payrolls increased $12.0 billion, compared with an increase
of $20.9 billion.
Government wage and salary disbursements increased $5.8 billion in February, compared with an
increase of $10.7 billion in January. Pay raises for federal civilian personnel added $0.9 billion to the
change in government payrolls in February; pay raises for federal civilian and military personnel had
added $7.2 billion to government payrolls in January.
Employer contributions for employee pension and insurance funds increased $4.7 billion in
February, compared with an increase of $5.8 billion in January.
Employer contributions for government social insurance increased $1.2 billion in February,
compared with an increase of $6.1 billion in January. The January increase reflected an increase in
the tax rate paid by employers to state unemployment insurance funds and an increase in the social
security taxable wage base (from $97,500 to $102,000); together, these changes added $4.0 billion
to the January change. (Changes in employer contributions for government social insurance do not
affect personal income, because employer contributions for government social insurance are also
included in total contributions for government social insurance, which is a subtraction in the
calculation of personal income.)
Other personal income
Proprietors' income decreased $5.8 billion in February, in contrast to an increase of $5.6 billion
in January. Farm proprietors' income decreased $3.2 billion, compared with a decrease of $3.4
billion. Nonfarm proprietors' income decreased $2.7 billion, in contrast to an increase of $9.0 billion
in January.
Rental income of persons decreased $4.0 billion in February, compared with a decrease of $3.9
billion in January. Personal income receipts on assets (personal interest income plus personal
dividend income) increased $4.0 billion, compared with an increase of $3.0 billion.
Personal current transfer receipts increased $38.2 billion in February, in contrast to a decrease
of $4.7 billion in January. The changes in personal current transfer receipts primarily reflect the
pattern of federal Medicare part D prescription drug payments, which were $46.4 billion in
February, $17.2 billion in January, $39.1 billion in December, and $35.3 billion in November.
These payments were reduced in $27.1 billion in January, $8.5 billion in December, and $8.7 billion
in November to recover overpayments that were made in 2006. The January change in current
transfer receipts reflected 2.3-percent cost-of-living adjustments to social security benefits and to
several other federal transfer payment programs; together, these changes added $15.5 billion to the
January change. The January change in current transfer receipts was also reduced by lump-sum
social security benefits payments, which had added $6.9 billion to December benefit payments;
these benefit payments resulted from a recalculation of the earnings base underlying the benefits for
recent retirees.
Contributions for government social insurance -- a subtraction in calculating personal income --
increased $2.6 billion in February, compared with an increase of $14.1 billion in January. The
January increase reflected increases in both employer and personal contributions for government
social insurance. As noted above, employer contributions were boosted $4.0 billion in January by
increases in unemployment-insurance rates and in the social security taxable wage base. The
January increase in personal contributions for government social insurance reflected an increase in
the monthly premium paid by participants in the supplementary medical insurance program
(Medicare part B) and in the increase in the social security taxable wage base; these changes added
$5.0 billion to January personal contributions.
Personal current taxes and disposable personal income
Personal current taxes increased $7.3 billion in February, in contrast to a decrease of $13.3
billion in January. Federal net nonwithheld income taxes (payments of estimated taxes plus final
settlements less refunds) reduced the January change by $23.2 billion, based on federal budget
projections of lower final settlements and higher refunds for 2008. Indexation provisions of current
tax law reduced federal withheld income taxes by $4.1 billion in January.
Disposable personal income (DPI) -- personal income less personal current taxes -- increased
$48.7 billion, or 0.5 percent, in February, compared with an increase of $43.7 billion, or 0.4 percent,
in January.
Personal outlays and personal saving
Personal outlays -- PCE, personal interest payments, and personal current transfer payments
increased $15.8 billion in February, compared with an increase of $45.8 billion in January. PCE
increased $12.0 billion, compared with an increase of $42.0 billion.
Personal saving -- DPI less personal outlays -- was a positive $27.1 billion in February, in
contrast to a negative $5.7 billion in January. Personal saving as a percentage of disposable personal
income was a positive 0.3 percent in February, in contrast to a negative 0.1 percent in January.
Negative personal saving reflects personal outlays that exceed disposable personal income. 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 and data on changes in net worth (which help finance consumption), go to
/bea/dn/nipaweb/Nipa-Frb.asp.
Real DPI and real PCE
Real DPI -- DPI adjusted to remove price changes -- increased 0.3 percent in February, compared
with an increase of 0.1 percent in January.
Real PCE -- PCE adjusted to remove price changes -- was unchanged in February; real PCE
increased 0.1 percent in January. Purchases of durable goods increased 0.2 percent in February, in
contrast to a decrease of 0.8 percent in January. Purchases of nondurable goods decreased 0.1
percent in February, the same decrease as in January. Purchases of services increased less than 0.1
percent in February, compared with an increase of 0.4 percent in January.
PCE prices -- The price index for PCE increased 0.1 percent in February, compared with an
increase of 0.3 percent in January. Prices, excluding food and energy, increased 0.1 percent,
compared with an increase of 0.2 percent.
Revisions
Estimates have been revised for October 2007 through January 2008. Changes in personal
income, current-dollar and chained (2000) dollar DPI, and current-dollar and chained (2000) dollar
PCE for December and January -- revised and as published in last month's release -- are shown
below.
Change from preceding month
December January
Previous Revised Previous Revised Previous Revised Previous Revised
(Billions of dollars) (Percent) (Billions of dollars) (Percent)
Personal Income:
Current dollars..................... 54.0 52.5 0.5 0.4 32.2 30.4 0.3 0.3
Disposable personal income:
Current dollars..................... 46.0 46.0 0.4 0.4 46.6 43.7 0.4 0.4
Chained (2000) dollars.............. 11.4 14.5 0.1 0.2 7.1 10.6 0.1 0.1
Personal consumption expenditures:
Current dollars..................... 32.0 22.5 0.3 0.2 39.9 42.0 0.4 0.4
Chained (2000) dollars.............. 0.7 -4.3 0.0 -0.1 2.6 10.2 0.0 0.1
BEA's national, international, regional, and industry estimates; the Survey of Current Business;
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Next release -- May 1, 2008 at 8:30 A.M. EDT for Personal Income and Outlays for March.