Disposable personal income is flat and real disposable income is negative but consumers are spending more anyway.

That is the message from the BEA's Personal Income and Outlays reports for February and March, both released today.

March

  • Personal income increased $11.4 billion (0.1 percent) in March according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $0.6 billion, (less than 0.1 percent) and personal consumption expenditures (PCE) increased $123.5 billion (0.9 percent).
  • Real DPI decreased 0.2 percent in March, and real PCE increased 0.7 percent. The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased less than 0.1 percent.
  • In March, real PCE increased $87.4 billion, which reflected a $66.3 billion increase in spending on goods and an increase of $27.9 billion in spending on services. Within goods, increases were widespread, with spending on motor vehicles and parts the leading contributor. Within services, the largest contributor to the increase was spending on health care.

February

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  • Personal income increased $35.6 billion (0.2 percent) in February. Disposable personal income increased $23.0 billion (0.1 percent), and personal consumption expenditures increased $11.7 billion (0.1 percent).
  • Real DPI increased less than 0.1 percent in February, and real PCE decreased less than 0.1 percent. The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.1 percent.
  • The increase in personal income in February primarily reflected increases in compensation of employees, government social benefits to persons, and personal dividend income that were partially offset by a decrease in personal interest income.
  • In February, real PCE decreased $2.8 billion, which reflected a $23.4 billion decrease in spending on goods. This was partially offset by an increase of $16.4 billion in spending on services (table 7). Within goods, food and beverages purchased for off-premises consumption was the leading contributor to the decrease. Within services, the largest contributor to the increase was spending on household electricity and gas.

Synopsis

Make less, spend more.

This data, released today, was supposedly already factored into the GDP report for the first quarter.

These reports strongly suggest the government slowdown had a far bigger impact than expected.

Mike "Mish" Shedlock

Personal Income Up But Real Consumer Spending Declines Second Month

The BEA’s Personal Income and Outlays report shows personal income rose 0.4% but consumer spending rose a scant 0.1% in February.

Disposable Income and Spending Jump: Real Income and Spending is Another Matter

Disposable personal income rose 0.4%, but real income rose only 0.1%. Real personal consumption expenditures were flat.

Personal Income Declines in January, Spending Very Weak in December and January

The BEA combined reports for January and February due to the shutdown. February details are incomplete.

Real Incomes Rises 0.3% in June, Real Spending 0.2%, Deflator 0.1%

Personal income and spending in June rose mostly inline with the Economic consensus.

Personal Income and Outlays for Dec, Income Only for Jan: Spending -0.5% in Dec

The BEA's reports were among those delayed in the shutdown. Consumer spending is still delayed.

Personal Income Jumps But Spending Weak

Personal income rose 0.4% in August but spending, both nominal and real, rose a weak 0.1%

Personal Income Up 0.1%, Spending Up 0.6%: What's the Problem?

Personal Income is up 0.1%, spending is up 0.6%. Real Disposable Income is up 0.1%, real spending is up 0.4%.

March Construction Spending Unexpectedly Declined by 0.9%

Construction spending declined 0.9% in March and revisions in February were negative.

Spending Up Far More than Real Income: Per Capita Income Stagnates

Real (inflation-adjusted) income rose 0.1% in November. Expenditures rose 0.4%. Per capita, income is stagnant.