Personal Income Rises Less Than Expected in December 2021

U.S. Bureau of Labor Statistics

Personal income increased $70.7 billion (0.3 percent) in December according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $39.9 billion (0.2 percent) and personal consumption expenditures (PCE) decreased $95.2 billion (0.6 percent).

Real DPI decreased 0.2 percent in December and Real PCE decreased 1.0 percent; goods decreased 3.1 percent and services increased 0.1 percent. The PCE price index increased 0.4 percent. Excluding food and energy, the PCE price index increased 0.5 percent.

Aug. Sept. Oct. Nov. Dec.
Percent change from preceding month
Personal income:
     Current dollars 0.3 -1.0 0.6 0.5 0.3
Disposable personal income:
     Current dollars 0.3 -1.3 0.5 0.4 0.2
     Chained (2012) dollars -0.1 -1.6 -0.2 -0.2 -0.2
Personal consumption expenditures (PCE):
     Current dollars 1.1 0.6 1.5 0.4 -0.6
     Chained (2012) dollars 0.7 0.3 0.9 -0.2 -1.0
Price indexes:
     PCE 0.4 0.3 0.6 0.6 0.4
     PCE, excluding food and energy 0.3 0.2 0.4 0.5 0.5
Price indexes: Percent change from month one year ago
     PCE 4.2 4.4 5.1 5.7 5.8
     PCE, excluding food and energy 3.6 3.7 4.2 4.7 4.9

The increase in personal income in December primarily reflected an increase in compensation that was partly offset by a decrease in proprietors’ income. Within compensation, the increase reflected increases in both private and government wages and salaries. Within proprietors’ income, both nonfarm and farm income decreased. Government social benefits decreased slightly, reflecting the winding down of pandemic-related assistance programs.

The $95.2 billion decrease in current-dollar PCE in December reflected a decrease of $147.2 billion in spending for goods that was partly offset by a $52.0 billion increase in spending for services. Within goods, decreases were widespread across most components and were led by recreational goods and vehicles, “other” nondurable goods (which includes newspapers, household supplies, and games and toys), and furnishings and durable household equipment. Within services, the largest contributor to the increase was spending for health care.

Personal outlays decreased $93.5 billion in December. Personal saving was $1.44 trillion in December and the personal saving rate—personal saving as a percentage of disposable personal income—was 7.9 percent.

The PCE price index for December increased 5.8 percent from one year ago, reflecting increases in both goods and services. Energy prices increased 29.9 percent while food prices increased 5.7 percent. Excluding food and energy, the PCE price index for December increased 4.9 percent from one year ago.

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