September Gains in Personal Income


The most recent data release from the Bureau of Economic Analysis (BEA) showed that personal income increased to a seasonally adjusted annual rate (SAAR) of $19,804 billion in September. It was up 0.9%, after a 2.5% decline in August when the weekly unemployment supplement payment of $600 expired. This increase in personal income largely came from the gains of proprietors’ income, compensation of employees and rental income. However, personal income from wages and salaries increased $74.5 billion (SAAR), as the economy continued to reopen.

Real disposable income (income remaining after adjusting for taxes and inflation) inched up 0.7% in September after a decrease of 3.2% in August. After a record plunge in April, personal consumption expenditures (PCE) rose 1.4% in September, marking the fifth consecutive month of increases. However, PCE was still 0.6% lower than a year ago.

In August, the gains in both consumer spending and personal income drew the personal savings rate down slightly to 14.3%, compared to a record high savings rate of 33.6% in April. Personal savings stood at $2.5 billion (SAAR) in August, almost 75% above the level before the pandemic hit the economy.

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