by Calculated Risk on 3/04/2012 09:37:00 AM

Yesterday:
• Summary for Week ending March 2nd
• Schedule for Week of March 4th

By request, a couple more graphs based on the January Personal Income and Outlays report. The first graph shows real personal income less transfer payments in 2005 dollars. This has been slow to recover - real personal income less transfer payments increased 0.2% in January. This remains 3.9% below the previous peak in early 2008.

Click on graph for larger image.

Personal current transfer receipts decreased $3.6 billion in January, in contrast to an increase of $13.8 billion in December. Within personal current transfer receipts, “other” government social benefits to persons decreased $14.9 billion in January, in contrast to an increase of $1.5 billion in December. The January change in “other” government social benefits to persons reflected a decrease of $13.6 billion due to the expiration of the Making Work Pay refundable tax credits. Government social benefits for Medicaid decreased $7.8 billion in January, in contrast to an increase of $0.2 billion in December. Government social benefits for social security increased $20.3 billion in January, compared to an increase of $9.6 billion in December. The January change reflected 3.6-percent cost-of-living adjustments (COLAs) to social security benefits and to several other federal transfer payment programs. Together, these COLAs added $30.2 billion to the January increase in government social benefits to persons.

The second graph is for the personal saving rate.

The saving rate decreased to 4.6% in January.

Personal saving -- DPI less personal outlays -- was $540.6 billion in January, compared with $552.1 billion in December. The personal saving rate -- personal saving as a percentage of disposable income -- was 4.6 percent in January, compared with 4.7 percent in December.

This graph shows the saving rate starting in 1959 (using a three month trailing average for smoothing) through the January Personal Income report.

After increasing sharply during the recession, the saving rate has been moving down for the last two to three years - so spending growth has increased a little faster than income growth.