Personal income rose $179.0 billion (1.0%) in December before declining $23.8 billion (-0.1%) in January, the Bureau of Economic Analysis (BEA) reported Friday.
The consensus forecast for December was looking for just a 0.4% gain in personal income, with forecasts ranging from a low of 0.2% to a high of 0.5%.
The report combines estimates for December 2018 and January 2019. For December, estimates include both income and outlays measures, while January was limited to personal income.
Estimates of outlays in January are unavailable due to the delay in the Census Bureau’s Advance Monthly Retail Sales.
For December, disposable personal income (DPI) rose $173.1 billion (1.1%), and personal consumption expenditures (PCE) declined $76.6 billion (-0.5%). Real DPI rose 1.0% in December and real PCE declined 0.6%.
The PCE price index rose 0.1%. Excluding food and energy, the PCE price index rose 0.2%.
Personal outlays fell $71.3 billion in December, while personal saving rose to $1.21 trillion. The personal saving rate, defined as personal saving as a percentage of disposable personal income, rose to 7.6%
For January, personal income dipped $23.8 billion (-0.1%), while disposable personal income (DPI) fell $35.1 billion (-0.2%).
The consensus forecast for January was looking for a gain of 0.3% gain in personal income, with forecasts ranging from a low of 0.3% to a high of 0.5%.
Real DPI is unavailable for January.
2018 Personal Income and Outlays
Personal income rose 4.5% in 2018, compared with an increase of 4.4% in 2017. DPI increased 5.0% in compared with a gain of 4.4% in 2017. In 2018, PCE rose 4.7%, compared with an increase of 4.3% in 2017.
Real DPI rose 2.9% in 2018, compared to a gain of 2.6% in 2017. Real PCE saw a 2.6% increase, compared with 2.5% in 2017.
The Personal Income and Outlays report follows the BEA combined initial and second estimate on Q4 2018 gross domestic product (GDP).
The Bureau of Economic Analysis (BEA) said GDP for the fourth quarter (Q4) 2018 came in at a solid 2.6%, beating the forecast. GDP for Q3 2018 came in at a strong 3.4%.
Real GDP increased by 2.9% in 2018 when measured from the 2017 annual level to the 2018 annual level. From Q4 2017 to Q4 2018, real GDP gained 3.1%, up from 2.5% in 2017.