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Personal Income and Outlays

The BEA's Personal Income and Outlays Report for February tells the story. 

Key Points 

  • Personal Income income decreased $1,516.6 billion (7.1 percent).
  • Personal Current Transfer Receipts (PCTR) decreased $1.584 billion (27.4 percent)
  • Disposable Personal Income (DPI) decreased $1,532.3 billion (8.0 percent)
  • Personal Consumption Expenditures (PCE) decreased $149.0 billion (1.0 percent).
  • Real DPI decreased 8.2 percent in February
  • Real PCE decreased 1.2 percent; goods decreased 3.3 percent and services decreased 0.1 percent.
  • The PCE price index increased 0.2 percent. 
  • Excluding food and energy, the PCE price index increased 0.1 percent.

Meaning of Real

Real means inflation-adjusted, assuming you believe the reported price index measures.

BEA Statement

The estimate for February personal income and outlays was impacted by the continued government response to COVID-19. Economic impact payments associated with the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act of 2021 (which was enacted on December 27, 2020) declined sharply in February and unemployment benefits continued, but at a lower level. Additionally, restrictions and closures continued in some areas of the United States. 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.

Transfer Payments (PCTR)

Transfer payments are free money or money equivalents from the Federal government.

The category includes food stamps, a relatively stable transfer payment, and Covid stimulus items (one time and ongoing).

There was a "one time" leap in March of 2020 and another "one time" jump in January of 2021. 

Democrats are angling for another "one time" jump, with some Republicans in agreement. 

Transfer Payments Declined in February

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Transfer payments declined in February from $5.778 billion to $4.194 billion,  a 27.4 percent decline. 

That is due to another "one-time" payment in January of which Democrats want a third.

Excluding and Including PCTR

  • Excluding transfer payments personal income rose slightly from $15.685 billion to $15.752 billion.
  • Personal income excluding PCTR is still below the pre-Covid level of $15.905 billion.
  • Including PCTR, income fell from $21.462 billion to 19.946 billion, a decline of 7.1 percent. 
  • Including PCTR income is $19.946 billion vs $19.116 billion  pre-Covid.


With total income down for the month due to the drop in PCTR, spending (PCE) declined from $14.939 billion to $14.790 billion.

PCTR Shotgun Approach 

The shotgun approach of the current programs is not very efficient. 

Some people are making more unemployed than they made employed. Many millions of people got checks even though they never stopped working. 

The Fed, Congress, Taxes

The Fed is hell bent on producing inflation which seriously harms everybody, but especially those who do not have a job or are working fewer hours.

For discussion of the Fed, please see Easy Money Quote of the Day: Fed "Won't Take the Punch Bowl Away"

Meanwhile, Democrats want to increase your taxes to pay for all this free money. 

So Expect Higher Taxes, Possibly a VAT, to Support Huge $4 Trillion Infrastructure Bill and the huge transfer payments.