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Personal Income and Outlays from the BEA, annotations by Mish

Weak Income, Strong Spending

The Personal Income and Outlays report for September repeats the central theme for several months, weak income but strong spending anyway.

Personal Income

• Personal income increased $77.8 billion (0.3 percent at a monthly rate) in September.
• Disposable personal income (DPI), personal income less personal current taxes, increased $56.1 billion (0.3 percent).
• Real DPI decreased 0.1 percent in September and was lower for the third consecutive month.

Personal Consumption Expenditures (PCE)

• PCE increased $138.7 billion (0.7 percent).
• Real PCE increased 0.4 percent; goods increased 0.5 percent and services increased 0.3 percent.

PCE Price Index

• The PCE price index increased 0.4 percent.
• Core PCE, excluding food and energy, increased 0.3 percent.

Real Income and Spending Billions of Chained Dollars

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Real Income and Outlays data from the BEA, chart by Mish

The three rounds of massive fiscal stimulus is easily visible in the above chart. This fueled spending and inflation.

Real Personal Consumption Expenditures

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Real PCE from the BEA chart by Mish

Real PCE continues unabated despite a drop in real DPI. Consumers dip into savings to support lifestyles.

Real Disposable Personal Income Excluding Transfers

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Real DPI Excluding transfers data from BEA, chart by Mish

Transfers are free money handouts from the government. Transfers include Medicare, Medicaid, disability checks, and Social Security.

Excluding transfers, real income has gone nowhere. It’s up less than half a percent in the last three months combines.

The NBER, the official arbiter arbiter of recessions, uses Real DPI Excluding Transfers in its recession estimates.

Blowout 4.9 Percent Increase in GDP

Also see Blowout 4.9 Percent Increase in GDP But Real Disposable Income Declines 1.0 Percent

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