Personal income increased $233.7 billion (1.0 percent at a monthly rate) in January. Disposable personal income (DPI)—personal income less personal current taxes—increased $67.6 billion (0.3 percent). Personal outlays—the sum of personal consumption expenditures (PCE), personal interest payments, and personal current transfer payments—increased $54.3 billion (0.3 percent) and consumer spending increased $43.9 billion (0.2 percent). Personal saving was $779.3 billion and the personal saving rate—personal saving as a percentage of disposable personal income—was 3.8 percent in January.
Personal income
In January, personal income increased, primarily reflecting increases in government social benefits, personal income on assets, and compensation.
- The increase in government social benefits was led by increases in social security benefits, primarily reflecting a 3.2 percent cost-of-living adjustment, and other government social benefits, led by enrollments in Affordable Care Act plans.
- The increase in personal income on assets was led by personal dividend income, reflecting a special dividend paid by Costco Wholesale Corporation.
- Within compensation, the increase was led by private wages and salaries, based on data from the Bureau of Labor Statistics’ (BLS) Current Employment Statistics (CES). Services-producing industries increased $33.9 billion and goods-producing industries decreased $2.0 billion.
Consumer spending
The $43.9 billion increase in consumer spending in January reflected an increase in spending for services that was partly offset by a decrease in spending for goods.
- Within services, the largest contributors to the increase were housing and utilities; financial services and insurance (led by financial service charges, fees, and commissions); and health care (led by hospitals), based on BLS CES and private data.
- Within goods, the largest contributors to the decrease were motor vehicles and parts (led by new light trucks), based on unit sales data from Wards Intelligence; gasoline and other energy goods (led by gasoline), based on Energy Information Administration data; and other nondurable goods (led by prescription drugs), based on private trade data.
PCE price index
From the preceding month, the PCE price index for January increased 0.3 percent. Food prices increased 0.5 percent and energy prices decreased 1.4 percent. Excluding food and energy, the PCE price index increased 0.4 percent. For a comparison of PCE prices to BLS consumer price indexes, refer to NIPA Table 9.1U. Reconciliation of Percent Change in the CPI with Percent Change in the PCE Price Index.
From the same month one year ago, the PCE price index for January increased 2.4 percent. Prices for services increased 3.9 percent and prices for goods decreased 0.5 percent. Food prices increased 1.4 percent and energy prices decreased 4.9 percent. Excluding food and energy, the PCE price index increased 2.8 percent from one year ago.
Real disposable personal income and consumer spending
Real DPI decreased less than 0.1 percent in January. Real consumer spending decreased 0.1 percent, reflecting a decrease in spending on goods of 1.1 percent that was partly offset by an increase in spending on services of 0.4 percent. Within goods, the leading contributor to the decrease was motor vehicles and parts (mainly new light trucks). Within services, the largest contributor to the increase was housing and utilities (led by utilities).
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