Personal and Disposable Income Increased but Personal Consumption Expenditures Declined in December 2021

The U.S. Bureau of Economic Analysis (BEA) reported on Friday (1-28-22) that, according to their estimates, personal income (PI) increased $70.7 billion (0.3%) in December. Disposable personal income (DPI) increased $39. billion (0.2%) in December. Personal consumption expenditures (PCE) decreased $95.2 billion (0.6%) in December.

Real DPI decreased -0.2% in December, while Real PCE decreased 1.0%. Spending on services increased 0.1%, while spending on goods decreased -3.2%. The PCE price index for December increased 0.4%. Excluding food and energy, the PCE price index for December increased 0.5%.

Year-over-year, the PCE price index for December increased 5.8%, reflecting increases in both goods and services. Energy prices increased 29.9%, while food prices increased 5.7%. Excluding food and energy, the PCE price index for December increased 4.9% from one year ago.

Personal outlays decreased $93.5 billion in December. Personal saving was $1.44 trillion in December, and the personal saving rate — personal saving as a percentage of disposable personal income — was 7.9%.