Personal Income and Outlay Both Increased in August 2021

The U.S. Bureau of Economic Analysis (BEA) reported on Friday (10-1-21) that according to their estimates, personal income (PI) increased $35.5 billion, or 0.2%, in August. Disposable personal income (DPI) increased $18.9 billion, or 0.1%, in August. Personal consumption expenditures (PCE) increased $130.5 billion, or 0.8%, in August. Real DPI decreased -0.3% in August, while Real PCE increased 0.4%; goods increased 0.6%, and services increased 0.63. The PCE price index increased 0.4%. Excluding food and energy, the PCE price index increased 0.3%.

The BEA indicates that the estimate for August personal income and outlays reflected the continued economic recovery, reopening of establishments, and government response related to the COVID-19 pandemic. Government social benefits increased in August, reflecting advance Child Tax Credit payments authorized by the American Rescue Plan. The full economic effects of the COVID-19 pandemic cannot be quantified in the personal income and outlays estimate because the impacts are generally embedded in source data and cannot be separately identified.

Personal outlays increased $132.6 billion in August. Personal saving was $1.72 trillion in August and the personal saving rate — personal saving as a percentage of disposable personal income — was 9.6%. Year-over-year the PCE price index increased 4.3%, reflecting increases in both goods and services. Year-over-year energy prices have increased 24.9% and food prices have increased 2.8%. Excluding food and energy, the PCE price index for August increased 3.6% from one year ago.