US Personal Income Rises by 0.9 Percent in Jan 2025, Outstrips Consumer Spending
Disposable personal income rose by $194.3 billion compared to the previous month
Personal income in the United States saw $221.9 billion or 0.9 percent increase in January, while consumer spending declined by $30.7 billion or 0.2 percent, a report of the U.S. Bureau of Economic Analysis said.
Disposable personal income also rose by $194.3 billion or 0.9 percent compared to the previous month.
Personal Income and Outlays
The report said that personal outlays, which include personal consumption expenditures along with personal interest payments and transfer payments, dropped by $52.7 billion in January.
The personal saving rate notably increased to 4.6 percent of disposable personal income, with total personal savings reaching $1.01 trillion. These figures indicate a robust gain in household financial health and a cautious approach to expenditure.
Consumption Patterns Shift
The $30.7 billion reduction in personal consumption expenditures was primarily driven by $76.7 billion drop in goods spending. However, this was partially offset by a $46.0 billion increase in spending on services. This shift underscores a change in consumer preference and spending focus from goods to services.
Inflation and Price Index
The Personal Consumption Expenditures (PCE) price index, a measure of inflation, rose by 0.3 percent in January from the previous month. When excluding food and energy, the core PCE price index also rose by 0.3 percent. Year-over-year, the PCE price index showed a 2.5 percent increase, while the core index, which provides a clearer measure of inflation trends, was up 2.6 percent.
Source: BEA Press Release
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