Source: Bureau of Economic Analysis
Personal income increased for the second straight month in July while spending cooled amid the decline in purchases of motor vehicles and recreational goods.
- Personal income climbed 1.1% or $225.9 billion, following the 0.2% growth recorded in June. Disposable income increased 1.1%, or $198.0 billion.
- Growth is attributed to increases in government social benefits and private wages and salaries.
- A decline was seen in unemployment insurance, reflecting the drop in payments from the Pandemic Unemployment Compensation Program.
- Personal consumption expenditures climbed 0.3% or $42.2 billion, slower than the 1.1% in June. Spending for services grew $102.6 billion, while spending for goods fell $60.4 billion.
- Decreases were recorded across most categories. This was led by motor vehicles, recreational goods, and clothing and footwear.
- Year-on-year spending was up 4.2%, as energy prices surged 23.6% while food prices gained 2.4%. Excluding food and energy, spending climbed 3.6% from the previous year.
- Personal outlays jumped $45.4 billion, while personal savings stood at $1.72 trillion.