Personal Income and Outlays – December 2008

Personal Income and Spending At a Glance

• Personal Income: Down $25.3 billion
• Monthly Change: Down 0.2%
• Real Disposable Personal Income: Up 0.3%
• Personal Spending (Outlays): $10,219.3 billion (annual)
• Monthly Change: Down $104 billion

Technorati Tags: personal income, spending, disposable income, real DPI

PERSONAL INCOME AND OUTLAYS
December 2008
Personal income decreased $25.3 billion, or 0.2 percent, and disposable personal income (DPI)
decreased $25.1 billion, or 0.2 percent, in December, according to the Bureau of Economic Analysis.
Personal consumption expenditures (PCE) decreased $102.4 billion, or 1.0 percent. In November,
personal income decreased $44.0 billion, or 0.4 percent, DPI decreased $33.9 billion, or 0.3 percent, and
PCE decreased $77.8 billion, or 0.8 percent, based on revised estimates.

Real disposable income increased 0.3 percent in December, compared with an increase of 0.8
percent in November. Real PCE decreased 0.5 percent, in contrast to an increase of 0.3 percent. The
price index for PCE decreased 0.5 percent, compared with a decrease of 1.1 percent.

2008
Aug. Sept. Oct. Nov. Dec.
(Percent change from preceding month)
Personal income, current dollars 0.3 0.0 -0.1 -0.4 -0.2
Disposable personal income:
Current dollars -1.1 0.1 0.0 -0.3 -0.2
Chained (2000) dollars -1.1 0.0 0.5 0.8 0.3
Personal consumption expenditures:
Current dollars -0.2 -0.4 -1.1 -0.8 -1.0
Chained (2000) dollars -0.1 -0.5 -0.6 0.3 -0.5

Wages and salaries

Private wage and salary disbursements decreased $23.5 billion in December, compared with
a decrease of $12.1 billion in November. Goods-producing industries’ payrolls decreased $15.7
billion, compared with a decrease of $4.4 billion; manufacturing payrolls decreased $9.6 billion,
compared with a decrease of $3.1 billion. Services-producing industries’ payrolls decreased
$7.8 billion, compared with a decrease $7.7 billion. Government wage and salary disbursements
increased $2.3 billion, compared with an increase of $1.7 billion.

Other personal income

Proprietors’ income decreased $6.8 billion in December, compared with a decrease of $17.6
billion in November. Farm proprietors’ income decreased $0.9 billion, compared with a decrease of
$1.3 billion. Nonfarm proprietors’ income decreased $5.9 billion, compared with a decrease of
$16.3 billion.

Rental income of persons increased $4.3 billion in December, compared with an increase of
$2.8 billion in November. Personal income receipts on assets (personal interest income plus
personal dividend income) decreased $29.0 billion, compared with a decrease of $28.8 billion.

Personal current transfer receipts increased $24.4 billion in December, compared with an
increase of $7.5 billion in November. The December increase in personal current transfer receipts
reflected retroactive social security benefits payments of $7.4 billion at an annual rate, resulting
from a recalculation of the earnings base underlying the benefits for recent retirees. The December
increase in personal current transfer receipts also reflected provisions of the Supplemental
Appropriations Act of 2008, which provides up to 13 weeks of additional unemployment
compensation benefits to those who have exhausted their regular unemployment benefits. The
additional unemployment benefits boosted the level of personal current transfer receipts by $7.1
billion in December.

Contributions for government social insurance — a subtraction in calculating personal income –
decreased $3.1 billion in December, compared with a decrease of $1.9 billion in November.

Personal current taxes and disposable personal income

Personal current taxes decreased $0.2 billion in December, compared with a decrease of $10.1
billion in November. Disposable personal income (DPI) — personal income less personal current
taxes — decreased $25.1 billion, or 0.2 percent, in December, compared with a decrease of $33.9
billion, or 0.3 percent, in November.

Personal outlays and personal saving

Personal outlays — PCE, personal interest payments, and personal current transfer payments
decreased $104.6 billion in December, compared with a decrease of $80.0 billion in November.
PCE decreased $102.4 billion, compared with a decrease of $77.8 billion.

Personal saving — DPI less personal outlays — was $378.6 billion in December, compared
with $299.1 billion in November. Personal saving as a percentage of disposable personal
income was 3.6 percent in December, compared with 2.8 percent in November. For a
comparison of personal saving in BEA’s national income and product accounts with personal
saving in the Federal Reserve Board’s flow of funds accounts and data on changes in net worth,
which help finance consumption, go to www.bea.gov/national/nipaweb/Nipa-Frb.asp.

Real DPI and real PCE

Real DPI — DPI adjusted to remove price changes — increased 0.3 percent in December,
compared with an increase of 0.8 percent in November.

Real PCE — PCE adjusted to remove price changes — decreased 0.5 percent in December, in
contrast to an increase of 0.3 percent in November. Purchases of durable goods decreased 0.8
percent, in contrast to an increase of 1.0 percent. Purchases of nondurable goods decreased 1.8
percent in December, in contrast to an increase of 0.9 percent in November. Purchases of services
increased 0.1 percent, in contrast to a decrease of less than 0.1 percent.

PCE price index — the price index for PCE decreased 0.5 percent in December, compared with
a decrease of 1.1 percent in November. The PCE price index, excluding food and energy, was
essentially unchanged in December and in November.

Revisions

Estimates have been revised for October and November. Changes in personal income, current-
dollar and chained (2000) dollar DPI, and current-dollar and chained (2000) dollar PCE for October
and November — revised and as published in last month’s release — are shown below.

Change from preceding month
October November
Previous Revised Previous Revised Previous Revised Previous Revised
(Billions of dollars) (Percent) (Billions of dollars) (Percent)
Personal Income:
Current dollars…………………. 11.3 -11.3 0.1 -0.1 -20.7 -44.0 -0.2 -0.4
Disposable personal income:
Current dollars…………………. 16.7 -2.0 0.2 0.0 -11.8 -33.9 -0.1 -0.3
Chained (2000) dollars…………… 61.2 47.0 0.7 0.5 88.1 70.7 1.0 0.8
Personal consumption expenditures:
Current dollars…………………. -102.6 -116.2 -1.0 -1.1 -56.1 -77.8 -0.6 -0.8
Chained (2000) dollars…………… -38.6 -48.7 -0.5 -0.6 45.6 28.5 0.6 0.3

Personal Income and Outlays – December 2008 [PDF]

Source: Commerce Department, Bureau of Economic Analysis