by Calculated Risk on 1/27/2023 08:41:00 AM

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

Personal income increased $49.5 billion (0.2 percent) in December, according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $49.2 billion (0.3 percent) and personal consumption expenditures (PCE) decreased $41.6 billion (0.2 percent).

The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.3 percent. Real DPI increased 0.2 percent in December and Real PCE decreased 0.3 percent; goods decreased 0.9 percent and services were unchanged.
emphasis added

The December PCE price index increased 5.0 percent year-over-year (YoY), down from 5.5 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 4.4 percent YoY, down from 4.7 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 2022 (2012 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 the decrease in PCE was slightly below expectations.

Inflation was close to expectations.