by Calculated Risk on 1/26/2024 08:30:00 AM

The BEA released the Personal Income and Outlays report for December:

Personal income increased $60.0 billion (0.3 percent at a monthly rate) in December, according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI), personal income less personal current taxes, increased $51.8 billion (0.3 percent) and personal consumption expenditures (PCE) increased $133.9 billion (0.7 percent).

The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.2 percent. Real DPI increased 0.1 percent in December and real PCE increased 0.5 percent; goods increased 1.1 percent and services increased 0.3 percent
emphasis added

The December PCE price index increased 2.6 percent year-over-year (YoY), unchanged from 2.6 percent YoY in November, and down from the recent peak of 7.0 percent in June 2022.

The PCE price index, excluding food and energy, increased 2.9 percent YoY, down from 3.2 percent in November, and down from the recent peak of 5.4 percent in February 2022.

The following graph shows real Personal Consumption Expenditures (PCE) through December 2023 (2017 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

Personal income was at expectations, and PCE was well above expectations.

Inflation was slightly below expectations.