The Bureau of Economic Analysis (BEA) is reporting that personal income in July, increased to a seasonally adjusted annual rate (SAAR) of 420,043 billion. Up 0.4%, after a -1.0% drop in June. The personal income increase came from the gains in wages and salaries ($149.9 billion) as the economy continued to reopen in July. This as government social benefits, pandemic unemployment insurance, in particular, decreased over the same period of time. Real disposable income (income remaining after adjusting for taxes and inflation) dipped -0.1% in July after decreasing -1.8% in June. After a record plunge in April, personal consumption expenditures (PCE) rose 1.9% in July. However, PCE was still -2.8% lower than a year ago. Finally, in July, the rise in consumer spending and a drop in real personal income drew the personal savings rate down to 17.8%, compared to a record high savings rate of 33.7% in April. Personal savings remained elevated at an annual pace of $3,186.7 billion, albeit significantly lower than in the second quarter of 2020.
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