Real Disposable Personal Income Drops For The Third Month But Spending Jumps -

Real Disposable Personal Income Drops For The Third Month But Spending Jumps

Oct 27, 2023Jeremy ParkinsonFinance0

Personal Income and Outlays from the BEA, annotations by Mish
Weak Income, Strong SpendingThe Personal Income and Outlays report for September repeats the central theme for several months, weak income but strong spending anyway.
Personal Income

Personal income increased $77.8 billion (0.3 percent at a monthly rate) in September.

Disposable personal income (DPI), personal income less personal current taxes, increased $56.1 billion (0.3 percent).

Real DPI decreased 0.1 percent in September and was lower for the third consecutive month.

Personal Consumption Expenditures (PCE)

PCE increased $138.7 billion (0.7 percent).

Real PCE increased 0.4 percent; goods increased 0.5 percent and services increased 0.3 percent.

PCE Price Index

The PCE price index increased 0.4 percent.

Core PCE, excluding food and energy, increased 0.3 percent.

Real Income and Spending Billions of Chained Dollars
Real Income and Outlays data from the BEA, chart by MishThe three rounds of massive fiscal stimulus is easily visible in the above chart. This fueled spending and inflation.

Real Personal Consumption Expenditures
Real PCE from the BEA chart by MishReal PCE continues unabated despite a drop in real DPI. Consumers dip into savings to support lifestyles.

Real Disposable Personal Income Excluding Transfers
Real DPI Excluding transfers data from BEA, chart by MishTransfers are free money handouts from the government. Transfers include Medicare, Medicaid, disability checks, and Social Security.Excluding transfers, real income has gone nowhere. It’s up less than half a percent in the last three months combines.The NBER, the official arbiter arbiter of recessions, uses Real DPI Excluding Transfers in its recession estimates.Blowout 4.9 Percent Increase in GDPAlso see Blowout 4.9 Percent Increase in GDP But Real Disposable Income Declines 1.0 PercentMore By This Author:Blowout 4.9 Percent Increase In GDP But Real Disposable Income Declines 1.0 Percent After 22 Days The House Finally Has A Speaker, Meet Mike Johnson New Home Sales Jump 12.3 Percent Smash Expectations