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Let’s discuss the BEA’s Income and Outlays report for August.

Personal income increased $50.5 billion (0.2 percent at a monthly rate) in August.

Disposable personal income (DPI), personal income less personal current taxes, increased $34.2 billion (0.2 percent) and personal consumption expenditures (PCE) increased $47.2 billion (0.2 percent).

Personal Income and Outlays vs Bloomberg Expectations

• Personal Income: +0.2% vs Bloomberg Consensus +0.4%
• Personal Consumption Expenditures (PCE): +0.2% vs Bloomberg Consensus +0.3%

PCE Price Details

From the preceding month, the PCE price index for August increased 0.1 percent Prices for goods decreased 0.2 percent and prices for services increased 0.2 percent.

Food prices increased 0.1 percent and energy prices decreased 0.8 percent. Excluding food and energy, the PCE price index increased 0.1 percent.

From the same month one year ago, the PCE price index for August increased 2.2 percent. Prices for goods decreased 0.9 percent and prices for services increased 3.7 percent. Food prices increased 1.1 percent and energy prices decreased 5.0 percent.

Excluding food and energy, the PCE price index increased 2.7 percent from one year ago.

PCE Price Index vs Estimates

• PCE Price Index: +0.1% vs Bloomberg Consensus +0.1%
• PCE Price Index Year-Over-Year: +2.2% vs Bloomberg Consensus +2.3%

Personal Income Four Ways

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The above instructive chart shows the impact of inflation and handouts.

PCTR stands for Personal Current Transfer Receipts. PCTR includes items such as Medicare, Medicaid, food stamps, and Social Security. Disposable means after taxes.

• Personal Income: 24,738
• Disposable Personal Income: 21,699
• Real (inflation adjusted) DPI: 17,590
• Real DPI Minus PCTR: 13,918

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