Personal income increased by $71.7 billion in July, growing at a seasonally adjusted annual rate of 0.5%, according to the most recent data release from the Bureau of Economic Analysis.  Personal consumption expenditure rose by 0.3%, after a 0.6% increase in June.

Disposable personal income – income remaining after deducting personal income taxes – continued its steady growth, and so did personal consumption expenditures. In July, disposable personal income grew at an annual rate of 2.7% and personal consumption expenditures grew 3.0% since last year.

In July, 5.7% of disposable income went to personal savings, an uptick from a revised savings rate of 5.5% in June. 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.

Tags: personal consumption expenditures, personal income