BEA: Consumer Spending Up in February
Press release from the issuing company
Monday, April 1st, 2013
Personal income increased $143.2 billion, or 1.1 percent, and disposable personal income (DPI) increased $127.8 billion, or 1.1 percent, in February, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $77.2 billion, or 0.7 percent. In January, personal income decreased $513.5 billion, or 3.7 percent, DPI decreased $498.3 billion, or 4.0 percent, and PCE increased $40.8 billion, or 0.4 percent, based on revised estimates.
Real disposable income increased 0.7 percent in February, in contrast to a decrease of 4.0 percent in January. Real PCE increased 0.3 percent in February, the same increase as in January.
The January change in disposable personal income (DPI) mainly reflected the effect of special factors, such as the expiration of the “payroll tax holiday” and the acceleration of bonuses and personal dividends to December in anticipation of changes in individual tax rates. Excluding these special factors and others, which are discussed more fully below, DPI increased $46.8 billion in February, or 0.4 percent, after increasing $15.8 billion, or 0.1 percent, in January.
Wages and salaries
Private wage and salary disbursements increased $42.4 billion in February, in contrast to a decrease of $42.7 billion in January. The February and January levels of private wages and salaries were reduced by $15.0 billion (at an annual rate), reflecting the impact of accelerated bonuses in anticipation of changes to individual income tax rates. Goods-producing industries' payrolls increased $13.5 billion, in contrast to a decrease of $3.9 billion; manufacturing payrolls increased $8.5 billion, in contrast to a decrease of $3.5 billion. Services-producing industries' payrolls increased $28.9 billion, in contrast to a decrease of $38.8 billion.
Government wage and salary disbursements increased $0.7 billion in February, the same increase as in January. Pay raises for military personnel added $1.9 billion to government payrolls in January.
Other personal income
Supplements to wages and salaries increased $6.2 billion in February, compared with an increase of $6.0 billion in January.
Proprietors' income increased $12.6 billion in February, compared with an increase of $9.5 billion in January. Farm proprietors' income increased $4.8 billion, compared with an increase of $4.9 billion. Nonfarm proprietors' income increased $7.7 billion, compared with an increase of $4.6 billion.
Rental income of persons increased $9.9 billion in February, compared with an increase of $9.4 billion in January. Personal income receipts on assets (personal interest income plus personal dividend income) increased $68.9 billion, in contrast to a decrease of $375.2 billion. The level of personal dividend income was reduced $81.0 billion in January (at an annual rate), after a boost of $291.0 billion in December, reflecting accelerated and special dividend distributions paid in December; these adjustments reflected the impact of expected changes to individual income tax rates. For additional information, see the FAQ on “How would special and accelerated dividends affect the national income and product accounts in the fourth quarter 2012?” at www.bea.gov.
Personal current transfer receipts increased $9.0 billion in February, compared with an increase of $5.7 billion in January. The January estimates of current transfer receipts reflected 1.7-percent cost- of-living adjustments to social security benefits and to several other federal transfer payment programs; together, these changes added $15.2 billion to the January increase.
Contributions for government social insurance -- a subtraction in calculating personal income -- increased $6.4 billion in February, compared with an increase of $126.8 billion in January. The January estimate reflected increases in both employer and employee contributions for government social insurance. The January estimate of employee contributions for government social insurance reflected the expiration of the “payroll tax holiday,” that increased the social security contribution rate for employees and self-employed workers by 2.0 percentage points, or $114.1 billion at an annual rate. For additional information, see FAQ on “How did the expiration of the payroll tax holiday affect personal income for January 2013?” at www.bea.gov. The January estimate of employee contributions for government social insurance also reflected an increase in the monthly premiums paid by participants in the supplementary medical insurance program, in the hospital insurance provisions of the Patient Protection and Affordable Care Act, and in the social security taxable wage base; together, these changes added $12.9 billion to January. Employer contributions were boosted $5.9 billion in January, which reflected increases in the social security taxable wage base (from $110,100 to $113,700), in the tax rates paid by employers to state unemployment insurance, and in employer contributions for the federal unemployment tax and for pension guaranty. The total contribution of special factors to the January change in contributions for government social insurance was $132.9 billion.
Personal current taxes and disposable personal income
Personal current taxes increased $15.4 billion in February, in contrast to a decrease of $15.2 billion in January. Payments of final settlements and back taxes less refunds in federal net nonwithheld income taxes reduced the January change by $3.4 billion. Indexation provisions of current tax law reduced federal withheld income taxes by $1.4 billion in January. Disposable personal income (DPI) -- personal income less personal current taxes -- increased $127.8 billion, or 1.1 percent, in February, in contrast to a decrease of $498.3 billion, or 4.0 percent in January.
Personal outlays and personal saving
Personal outlays -- PCE, personal interest payments, and personal current transfer payments -- increased $79.4 billion in February, compared with an increase of $42.8 billion in January. PCE increased $77.2 billion, compared with an increase of $40.8 billion.
Personal saving -- DPI less personal outlays -- was $310.9 billion in February, compared with $262.5 billion in January. The personal saving rate -- personal saving as a percentage of disposable personal income -- was 2.6 percent in February, compared with 2.2 percent in January. For a comparison of personal saving in BEA’s national income and product accounts with personal saving in the Federal Reserve Board’s flow of funds accounts and data on changes in net worth, go to http://www.bea.gov/national/nipaweb/Nipa-Frb.asp.
Real DPI, real PCE and price index
Real DPI -- DPI adjusted to remove price changes -- increased 0.7 percent in February, in contrast to a decrease of 4.0 percent in January.
Real PCE -- PCE adjusted to remove price changes -- increased 0.3 percent in February, the same increase as in January. Purchases of durable goods increased 0.1 percent in February, compared with an increase of 0.4 percent in January. Purchases of nondurable goods increased 0.5 percent in February, the same increase as in January. Purchases of services increased 0.3 percent in February, compared with an increase of 0.2 percent in January.
PCE price index -- The price index for PCE increased 0.4 percent in February, compare with an increase of less than 0.1 percent in January. The PCE price index, excluding food and energy, increased 0.1 percent, compared with an increase of 0.2 percent.
2012 Personal Income and Outlays
Personal income increased 3.6 percent in 2012 (that is, from the 2011 annual level to the 2012 annual level), compared with an increase of 5.1 percent in 2011. DPI increased 3.3 percent, compared with an increase of 3.8 percent. PCE increased 3.6 percent, compared with an increase of 5.0 percent.
Real DPI increased 1.5 percent in 2012, compared with an increase of 1.3 percent in 2011. Real PCE increased 1.9 percent, compared with an increase of 2.5 percent.
