Personal Income and Spending up in August Amid Higher Wages and Benefits

Source: Bureau of Economic Analysis

Both personal income and disposable personal income continued to expand in August while spending rebounded, driven by the higher employee compensation and government benefits during the period. DXY is down 0.18%.

• Personal income grew by 35.5 billion or 0.2% in August, slower than the 1.1% increase recorded in July. Disposable personal income grew 0.1%, or $18.9 billion.
• The growth is attributed to higher wages and salaries, as well as an increase in Child Tax Credit payments as authorized by the American Rescue Plan.
• This was partly offset by the decline in unemployment insurance due to the decline in payments from the Pandemic Unemployment Compensation Program.
• Personal consumption expenditures rose by 0.8% or $130.5 billion, reflecting a growth of $66.0 billion in spending for goods and $64.6 billion for services.
• The PCE price index for the month grew 4.3% from the previous year, driven by growth in both goods and services, with energy prices up 24.9% and good prices up 2.8%.