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
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.
Spending
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.
Mish
When I got my stimulus check, I acted irresponsibly and bought some gold & silver bullion.
Keep up…1200 sent out last March, 600 sent in in Jan 2021, 1400 was just sent this month. Money is already in the pipeline…and there will be more to come…After all, money is free…isn’t it????
“Transfer payments are free money or money equivalents from the Federal government.”
Free money that we will be paying for one way or another.
Is it true 4000 deaths and 162000 screwed up people in the EU as a result of the vaccine? And ya’ll still want to take it???
What does that have to do with this topic?
No, it isn’t true. It’s bullshit.
And, fwiw, I took the vaccine, and everybody who works for me took it, and nobody I know had any problems at all. We just cut our chances of dying or experiencing serious morbidity from COVID.
Stop spreading misinformation. Are you Russian ?
Purely by the numbers, in the three months since vaccinations began, about 800,000 Americans would have passed away in a normal year. Since about 15% of the US has been vaccinated, you’d expect that about about 120,000 people who have been vaccinated would be among that group. When someone dies after getting the vaccine, their case is investigated as to whether it was related to the vaccine, or unrelated. I have not heard any evidence that the number of deaths in vaccinated people has been higher than in un-vaccinated people, but rather, to the contrary, there continue to be excess deaths in the un-vaccinated group.
Must be all those motorcyclists. 🙂