Personal income increased 0.6 percent (monthly rate) while consumer spending decreased 0.2 percent in December as many provisions of the CARES Act continued to wind down before the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act was enacted on December 27, 2020. Additionally, new restrictions and closures took effect in some areas of the United States.
The increase in personal income in December reflected increases in government social benefits compensation, and personal income receipts on assets. Within government social benefits, unemployment insurance increased reflecting an increase in pandemic unemployment compensation, the supplemental weekly payments to unemployment beneficiaries re-introduced by the CRRSA Act. There was also an increase in “other” social benefits reflecting an increase in payments from the Provider Relief Fund to nonprofit institutions. Within personal income receipts on assets, dividend income more than accounted for the increase, reflecting information from company financial statements. Additional information on factors affecting monthly personal income can be found on “Effects of Selected Federal Pandemic Response Programs on Personal Income.”
Current dollar consumer spending decreased in December, reflecting a decrease in goods that was partially offset by an increase in services.
- Within goods, durable goods (led by recreational goods and vehicles, notably information processing equipment) and nondurable goods (led by food and beverages) contributed to the decrease, based on Census Monthly Retail Trade Survey (MRTS) data.
- Within services, increases in household utilities (led by electricity) based on projections from the Energy Information Administration as well as in financial services and insurance (led by financial service charges, fees, and commissions) were partly offset by a decrease in food services and accommodations (led by food services) based on MRTS data.
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