US disposable personal income increased less than 0.1% in January over December, personal consumption expenditures up 2.1%; monthly changes reflect an increase in compensation partly offset by a decrease in government social benefits: Dept. of Commerce

WASHINGTON , February 25, 2022 (press release) –

Personal income increased $9.0 billion (less than 0.1 percent) in January, according to estimates released today by the Bureau of Economic Analysis (tables 3 and 5). Disposable personal income (DPI) increased $19.8 billion (0.1 percent) and personal consumption expenditures (PCE) increased $337.2 billion (2.1 percent).

Real DPI decreased 0.5 percent in January and Real PCE increased 1.5 percent; goods increased 4.3 percent and services increased 0.1 percent (tables 5 and 7). The PCE price index increased 0.6 percent. Excluding food and energy, the PCE price index increased 0.5 percent (table 9).

COVID-19 Impact on January 2022 Personal Income and Outlays
The estimate for January personal income and outlays reflected the continued economic recovery and government response to the COVID-19 pandemic. In January, COVID-19 cases resulted in continued restrictions and disruptions in the operations of establishments in some parts of the country. Government social benefits decreased, primarily reflecting the end of advance Child Tax Credit payments authorized to be paid out through December by the American Rescue Plan Act of 2021. The full economic effects of the COVID-19 pandemic cannot be quantified in the personal income and outlays estimate because the impacts are generally embedded in source data and cannot be separately identified. For more information, see Effects of Selected Federal Pandemic Response Programs on Personal Income.

The increase in personal income in January primarily reflected an increase in compensation that was partly offset by a decrease in government social benefits (table 3). Within compensation, the increase reflected increases in both private and government wages and salaries. Within government social benefits, a decrease in "other" social benefits (reflecting the end of advance Child Tax Credit payments as authorized by the American Rescue Plan) was partly offset by an increase in Social Security benefits (reflecting a 5.9 percent cost-of-living adjustment).

The $337.2 billion increase in current-dollar PCE in January reflected an increase of $285.4 billion in spending for goods and a $51.8 billion increase in spending for services (table 3). Within goods, increases were widespread, led by motor vehicles and parts, "other" nondurable goods, and recreational goods and vehicles. Within services, the largest contributor to the increase was spending for housing and utilities. Detailed information on monthly PCE spending can be found on Table 2.3.5U.

Personal outlays increased $342.2 billion in January (table 3). Personal saving was $1.17 trillion in January and the personal saving rate—personal saving as a percentage of disposable personal income—was 6.4 percent (table 1).

The PCE price index for January increased 6.1 percent from one year ago, reflecting increases in both goods and services (table 11). Energy prices increased 25.9 percent while food prices increased 6.7 percent. Excluding food and energy, the PCE price index for January increased 5.2 percent from one year ago.

Updates to Personal Income and Outlays

Estimates have been updated for July through December 2021. For July through September, estimates for compensation, personal taxes, and contributions for government social insurance reflect the incorporation of updated third-quarter wage and salary data from the Bureau of Labor Statistics Quarterly Census of Employment and Wages program. Revised and previously published changes from the preceding month for current-dollar personal income, and for current-dollar and chained (2012) dollar DPI and PCE, are provided below for November and December.

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Next release: March 31, 2022 at 8:30 A.M. EDT
Personal Income and Outlays, February 2022

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