Personal income increased by $57.4 billion in March, growing at a seasonally adjusted annual rate of 0.4%, according to the most recent data release from the Bureau of Economic Analysis. Personal income growth was mostly driven by the rise in compensation of employees ($34.6 billion) and assets revenue ($12.6 billion).
Disposable personal income – income remaining after deducting personal income taxes – continued its steady growth, and so did personal consumption expenditures. In March, disposable personal income grew at a rate of 4.0% and personal consumption expenditures grew by 3.5%.
In March, 5.4% of disposable income went to personal savings, an uptick from a revised savings rate of 5.1% in January. The savings rate rose with the onset of the Great Recession as households repaired their balance sheets. However, this process of deleveraging held back GDP growth due to reduced consumption.