by Calculated Risk on 8/02/2013 01:39:00 PM

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

Personal income increased $45.4 billion, or 0.3 percent ... in June, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $59.4 billion, or 0.5 percent.
...
Real PCE -- PCE adjusted to remove price changes -- increased 0.1 percent in June, the same increase as in May. ... The price index for PCE increased 0.4 percent in June, compared with an increase of 0.1 percent in May. The PCE price index, excluding food and energy, increased 0.2 percent, compared with an increase of 0.1 percent.

Core PCE increased at a 2.6% annual rate in June, but only a 1.2% annual rate in Q2.

The following graph shows real Personal Consumption Expenditures (PCE) through June (2009 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.

Real PCE increased at a 1.8% annual rate in Q2.

Note: This includes the comprehensive revisions and the change to 2009 dollars.

This is interesting! With the comprehensive revisions, personal income less transfer payments had returned to the pre-recession level. Note: The following graph constructed as a percent of the peak. This shows when the real personal income less transfer payments bottomed - and when the indicator returned to the level of the previous peak. If the indicator is at a new peak, the value is 100%.

This graph shows real personal income less transfer payments as a percent of the previous peak through the June report.

Before the revisions, this measure was off 11.2% at the trough in October 2009.  With the revisions, this indicator was "only" off 8.2% at the worst point (the recession wasn't as bad as originally reported).

Real personal income less transfer payments surged in December due to a one time surge in income as some high income earners accelerated earnings to avoid higher taxes in 2013 (I've left December out going forward).   Real personal income less transfer payments declined sharply in January (as expected), and are now close to the pre-recession peak..