Personal Income Growth

The latest federal data show that personal income was up 2 basis points in February 2019, following a drop in January of 1 basis point.

According to the National Association of Home Builders’ analysis, the February increase is largely due to wage and salary growth, proprietor’s income, and government social benefits. Real disposable income (adjusted after taxes and for inflation), fell 0.2 percent in January, the first real decrease since April 2018.

Personal consumption expenditures (PCE) rose 0.1 percent in January. After accounting for inflation, real PCE increased 0.1 percent after a decrease of 0.6 percent in December 2018. Spending rose slightly in January, primarily because of increases in spending for services, mainly financial services and insurance. On a year-over-year comparison, real personal consumption increased 2.3 percent in January.

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