Real incomes are down but spending surged.
The BEA Personal Income and Outlays report for August 2026 shows that personal income increased $66.6 billion (0.2 percent at a monthly rate) in August.
Income and Outlays Details
- Disposable personal income (DPI)—personal income less personal current taxes—increased $68.6 billion (0.3 percent)
- Personal consumption expenditures (PCE) increased $190.8 billion (0.9 percent).
PCE Price Index
- From the preceding month, the PCE price index for August increased 0.3 percent.
- Excluding food and energy, the PCE price index increased 0.2 percent.
- From the same month one year ago, the PCE price index for August increased 3.4 percent.
- Excluding food and energy, the PCE price index increased 3.0 percent from one year ago.
Adjusted for inflation, real personal income declined 0.1 percent in August. Real spending rose 0.6 percent.
Real Personal Income and Real Spending Percent Change from Year Ago
Consumers continue to spend faster than incomes rise. A buoyant stock stock market fuels spending by the asset holders. The rest are suffering from inflation.
Related Posts
September 30, 2026: BEA Revises Second-Quarter GDP 0.7 PP Higher to 2.2 Percent
The third estimate for GDP topped economist’s consensus estimates.
GDP Not Boosting Sentiment
On September 29, 2026 I noted US Consumer Confidence Plunges to the Lowest Level Since 2014
Views of the present situation and future expectations both declined dramatically.
On September 25, 2026, I noted Consumer Sentiment Drops in September to Just Above Record Lows
Republican attitudes decline the most, but from higher levels.
Partisan Sentiment Changes
- After particularly large declines in sentiment this month, Republican sentiment is now 20% lower than January 2026.
- Democrats are down 13% over the same period.
Consumers remain concerned over inflation no matter what economists and the GDP say about the economy.
you think inflation is bad now? ha ha. lived the 70s. sold beer and soda on gas lines in queens, donald epsteins hometown. i was a teen and sold beers to cops on gas lines. good times ahead. i’m buying………Only a few weeks away until the stupid midterms are over and the 2028 race starts. Biden v Trump rematch. Hunter V Don jr. would be my dream 2028 ticket in this crumbling evil warmongering grifter empire of debt and depression. Free fentanyl and meth for all K through medicare geezers.
‘Hawkeye’ Schmitt: *Consumers brought less; it just cost more. Good for the GDP …”
I’m wondering if people are buying now with the expectations that prices will be much higher down the road. Who knows?
Yes, people are buying now. I know this because I am. Just saw some technical items jump 10% in price today. Prices are jumping 10-20% on many items as businesses know that people will blame inflation.
This is what your government wants.
Ergo, household savings and credit are being eaten into. My own solution has been to maintain those things while cutting consumption.