Personal Income Up in September

Written by: John Landers

The Personal Income and Outlays Report reports that personal income increased by 0.4 percent or $48.1 billion in September, compared to 0.1 percent or $17.8 billion in August. Disposable personal income (DPI) also rose 0.4 percent or $43 billion. In August DPI increased $15.1 billion or 0.1 percent.  The moderate increase in disposable income represents additional resources that consumers used to purchase goods and services and bolster the tepid pace of future economic growth.

The other component of the report, personal consumption expenditures (PCE) rose by 0.8 percent or $87.9 billion in September. For the previous month, revised PCE increased by 0.5 percent or $59.9 billion. Real DPI (inflation-adjusted DPI) declined 0.1 percent in September and fell 0.3 percent in August. Real PCE increased 0.4 percent in September. In August, real PCE increased 0.1 percent.

Personal Income and Outlays Report Background 

The Bureau of Economic Analysis (BEA) releases the Personal Income and Outlays Report each month. Sometimes referred to as the Personal Consumption Report to offer insights and understanding into the consumer activities and aggregate economic expenditures. The two-part report focuses on personal income.

The personal income component calculates income earned from wages and salaries as well as other income, including interest, dividends, and rental income. The data, which is presented in dollar and percentages, is comprised mostly of wages and salaries received by individuals.

The other section of the report evaluates personal consumption of goods and services. It contains interest payments for non-mortgage obligations and transfer payments to government or social services. These include welfare, social security, and some business subsidies.

Wages and Salaries

Wages and salaries earned by individuals working in the private sector increased $19.5 billion in September, compared to $4.1 billion in August.

Here is the breakdown for payrolls data:

  • Goods-producing companies: +$2.9 billion/September, – $7.2 billion/August.
  • Manufacturing payrolls: + $0.5 billion/September, -$6.3 billion/August.
  • Service producing companies: +$16.6 billion/September, $11.3 billion/August
  • Government wages and salaries: $4.7 billion/September, +$3.3 billion/August

Income for non-farm business owners climbed $9.4 billion in September, compared to $4.8 billion in August. Rental property owners received an increase of $5.1 billion in September versus $5.0 billion in August.

Interest and Dividends

Interest and dividend income decreased $5.7 billion in September and declined $3.9 billion in August. Transfer payment to individuals, which dropped $1.6 billion in August, increased $12.7 billion in September. The social security component of transfer payments increased $14 billion in September, but decreased $2.4 billion in August.

Individuals paid $5.2 billion more in personal taxes in September, compared to an increase of $2.5 billion the prior month. DPI, which consists of personal income minus taxes, increased by $43 billion in September

Personal Outlays and Savings

Individuals paid out $93.1 billion more in interest payments in September, compared to $65 billion in August. Personal savings, which comprises disposal personal income minus personal outlays, decreased by $395 billion in September compared to $445.1 billion the prior month. This equates to a personal savings rate of 3.3 percent in September, down from 3.7 percent in August.


Personal Income Up in September

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