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Real Personal Income Declines 1.6% in September, Down Second Month

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6 comments on Real Personal Income Declines 1.6% in September, Down Second Month

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The BEA’s Personal Income and Outlays, September 2021 shows real disposable personal income declined 1.6%. 

Real spending rose 0.3%.

The year-over-year price index for Personal Consumption Expenditures (PCE), the Fed’s preferred measure of inflation was 4.4%.

Excluding food and energy, the PCE price index rose 3.6%.

Economists Badly Miss the Mark on Income

The Bloomberg Econoday consensus was for nominal personal income to decline only 0.1% vs the reported -1.0%.

The Econoday consensus for nominal spending was nearly on the mark, at 0.5% vs a reported 0.6%.

This was a very weak report. I will post chart details of what happened shortly. 

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Mike Shedlock

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6 Comments
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Ziggy
Ziggy
4 years ago
Also add some more to the decline in personal income because of the phony PCE inflation measure that understates the real cost of living that most people experience.
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KidHorn
KidHorn
4 years ago
If covid benefits were counted as income, this would explain the drop.
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JG1170
JG1170
4 years ago
Reply to  KidHorn
They were.
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tbergerson
tbergerson
4 years ago
What amazes me is Core PCI at 3.60 is 80 bips lower than Headline at 4.40.  Umm, isnt it Food and Energy that are two principle things driving inflation higher?
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KidHorn
KidHorn
4 years ago
Reply to  tbergerson
The 3.6 number excludes food and energy.
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Carl_R
Carl_R
4 years ago
Reply to  tbergerson
Over the long term, food and energy price increases are essentially identical to changes in everything else, because they factor into other increases, and other increases factor into them. While the long term changes are the same, food and energy prices are much more volatile, sometimes (as now) rising quickly, and other times falling. During times when they are falling, no one worries about the use of the “CPI excluding food and energy”, but when they are rising quickly, everyone wants to use the higher number. You can’t have it both ways. Use one number all the time, not whichever is higher in the recent month.
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