Price Index Increases 0.3 Percent, Next Year Huge Medical Price Pressures
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CPI and PCE inflation year-over-year
Please consider the much delayed Personal Income and Outlays report for September 2025
- Personal income increased $94.5 billion (0.4 percent at a monthly rate) in September, according to estimates released today by the U.S. Bureau of Economic Analysis. Disposable personal income (DPI)—personal income less personal current taxes—increased $75.9 billion (0.3 percent) and personal consumption expenditures (PCE) increased $65.1 billion (0.3 percent).
- Personal outlays—the sum of PCE, personal interest payments, and personal current transfer payments—increased $70.7 billion in September. Personal saving was $1.09 trillion in September and the personal saving rate—personal saving as a percentage of disposable personal income—was 4.7 percent.
Changes in Consumer Spending
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Personal Income and Real Personal Income
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Personal income and real personal income month-over-month
Personal Income Notes
- Personal Income: 0.4 percent
- Disposable Personal Income (After Taxes): 0.3 percent
- Real Personal Income: 0.1 percent
- Real Disposable Personal Income: 0.1 percent
- Real Personal Income Excluding Transfers: 0.1 percent
There are only three problems with the above chart and data. All three “Real” (adjusted for inflation) measures are bogus because the BEA, like the BLS assumes increases in homeowners insurance and property taxes don’t count as expenses.
Reported Inflation Year-Over-Year
- PCE: 2.8 percent
- Core PCE: 2.8 percent
- CPI: 3.0 percent
- Core CPI: 3.0 percent
Those numbers do not include year-over-year changes in property taxes or homeowners’ insurance.
Looking ahead to 2026, I expect big jumps in medical insurance due to Obamacare price hikes and subsidies. Those hikes will impact PCE (the Fed’s preferred measure of inflation) more than the CPI.
I will report on this separately.
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