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News Release

EMBARGOED UNTIL RELEASE AT 8:30 A.M. EST, Thursday, March 1, 2018
BEA 18-09

Personal Income and Outlays, January 2018

Personal income increased $64.7 billion (0.4 percent) in January according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $134.8 billion (0.9 percent) and personal consumption expenditures (PCE) increased $31.2 billion (0.2 percent).

Real DPI increased 0.6 percent in January and Real PCE decreased 0.1 percent. The PCE price index increased 0.4 percent. Excluding food and energy, the PCE price index increased 0.3 percent.

  2017 2018
  Sept. Oct. Nov. Dec. Jan.
  Percent change from preceding month
Personal income:
Current dollars 0.5 0.4 0.3 0.4 0.4
Disposable personal income:
Current dollars 0.4 0.3 0.3 0.4 0.9
Chained (2009) dollars 0.0 0.2 0.1 0.2 0.6
Personal consumption expenditures (PCE):
Current dollars 1.0 0.3 0.7 0.4 0.2
Chained (2009) dollars 0.6 0.2 0.5 0.2 -0.1
Price indexes:
PCE 0.4 0.2 0.2 0.1 0.4
PCE, excluding food and energy 0.2 0.2 0.1 0.2 0.3
Price indexes: Percent change from month one year ago
PCE 1.7 1.6 1.7 1.7 1.7
PCE, excluding food and energy 1.4 1.5 1.5 1.5 1.5
Quarterly Census of Employment and Wage Data Included in the Third Quarter of 2017
This news release includes revised estimates of wages and salaries, personal taxes, and contributions for government social insurance for July through September 2017 (third quarter). These estimates reflect the incorporation of the most recently available third-quarter wage and salary tabulations from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages (QCEW) program.
Impacts of the Tax Cuts and Jobs Act

Increases in the January estimates of disposable personal income and the personal saving rate mostly result from a decrease in personal current taxes, which reflect the effects of the Tax Cuts and Jobs Act (TCJA). BEA estimates that the TCJA reduced personal current taxes by $115.5 billion at an annual rate. BEA’s preliminary estimates of the effects of the TCJA are based in part on projections prepared by the Treasury Department’s Office of Tax Analysis. For more information on the TCJA’s effects on personal taxes, please see “How will the 2017 Tax Cuts and Jobs Act impact personal taxes?"

January estimates of wages and salaries were adjusted up by $30.0 billion to account for bonuses paid by businesses that are not included in the monthly source data in the Current Employment Statistics from the Bureau of Labor Statistics. This adjustment reflects one-time bonuses reported publicly in response to the TCJA and was derived based on news releases covering estimates of the number of employees receiving bonuses and payment amounts. BEA will release QCEW-based estimates of wages and salaries, that will include both regular and TCJA-related bonus activity, for the first quarter of 2018 on July 27, 2018.

The increase in personal income in January primarily reflected increases in wages and salaries and Social Security benefits that were partially offset by an increase in contributions for government social insurance, a subtraction in the calculation of personal income (table 3).

The $17.0 billion decrease in real PCE in January reflected a decrease of $24.6 billion in spending for goods and a partially offsetting $4.8 billion increase in spending for services (table 7). Within goods, new motor vehicle sales was the leading contributor to the decrease. Detailed information on monthly real PCE spending can be found in Table 2.3.6U.

Personal outlays increased $33.7 billion in January (table 3). Personal saving was $464.4 billion in January and the personal saving rate, personal saving as a percentage of disposable personal income, was 3.2 percent (table 1).

2017 Personal Income and Outlays

Personal income (table 6) increased 3.1 percent in 2017 (that is, from the 2016 annual level to the 2017 annual level), compared with an increase of 2.4 percent in 2016. DPI increased 2.9 percent in 2017 compared with an increase of 2.6 percent in 2016. In 2017, PCE increased 4.5 percent, compared with an increase of 4.0 percent in 2016.

Real DPI increased 1.2 percent in 2017, compared with an increase of 1.4 percent in 2016. Real PCE (table 8) increased 2.7 percent, the same increase as in 2016.

Updates to Personal Income and Outlays

Estimates have been updated for July through December. The percent change from the preceding month for current-dollar personal income, and for current-dollar and chained (2009) dollar DPI and PCE -- revised and as published in last month's release -- are shown below.

  Change from preceeding month
  November December
  Previous Revised Previous Revised Previous Revised Previous Revised
  (Billions of dollars) (Percent) (Billions of dollars) (Percent)
Personal income:
Current dollars 50.4 56.1 0.3 0.3 58.7 63.2 0.4 0.4
Disposable Personal income:
Current dollars 37.6 39.9 0.3 0.3 48.0 52.2 0.3 0.4
Chained (2009) dollars 2.6 8.8 0.0 0.1 28.1 27.4 0.2 0.2
Personal consumption expenditures:
Current dollars 101.9 92.0 0.8 0.7 54.2 53.1 0.4 0.4
Chained (2009) dollars 61.1 56.4 0.5 0.5 34.4 29.3 0.3 0.2

Next release: March 29, 2018 at 8:30 A.M. EDT Personal Income and Outlays: February 2018