by Calculated Risk on 8/30/2010 08:30:00 AM

From the BEA: Personal Income and Outlays, July 2010

Personal income increased $30.0 billion, or 0.2 percent ... Personal consumption expenditures (PCE) increased $44.1 billion, or 0.4 percent
...
Real PCE -- PCE adjusted to remove price changes -- increased 0.2 percent in July, compared with an increase of 0.1 percent in June.
...
Personal saving as a percentage of disposable personal income was 5.9 percent in July, compared with 6.2 percent in June.

Click on graph for large image.

This graph shows real personal income less transfer payments since 1969.

This measure of economic activity is moving sideways - similar to what happened following the 2001 recession.

This month the saving rate decreased slightly ...

This graph shows the saving rate starting in 1959 (using a three month trailing average for smoothing) through the July Personal Income report. The saving rate decreased to 5.9% in July from 6.2% in June (flat at 6.1% using a three month average).

I expect the saving rate to rise further - perhaps to 8% or more.

The increase in income was good news, but personal income less transfer payments are still only 1.2% above the low of last year - and still 5.5% below the pre-recession peak.