U.S. Bureau of Economic Analysis Reports on Personal Income and Outlay for December 2020

The U.S. Bureau of Economic Analysis (BEA) on Friday (1-29-21) released its Personal Income and Outlays Report for December 2020. According to the BEA estimates personal income increased $116.6 billion (0.6%) in December. Disposable Income (DPI) increased $111.6 billion (0.6%) but personal consumption expenditures (PCE) decreased by $27.9 billion (-0.2%). Real DPI increased 0.2% in December and Real PCE decreased -0.6%. The PCE price index increased 0.4%. Excluding food and energy, the PCE price index increased 0.3%. The increase in personal income in December primarily reflected increases in government social benefits, compensation, and personal dividend income that were partly offset by a decrease in proprietors’ income. The $79.8 billion decrease in real PCE in December reflected a decrease of $71.9 billion in spending for goods and a $17.6 billion decrease in spending for services. Personal outlays decreased $39.2 billion in December. Personal saving was $2.38 trillion in December and the personal saving rate—personal saving as a percentage of disposable personal income—was 13.7%