RSS Feed by Calculated Risk on 3/28/2025 08:30:00 AM
Friday, March 28, 2025
Personal Income increased 0.8% in February; Spending increased 0.4%
The BEA released the Personal Income and Outlays report for February:
Personal income increased $194.7 billion (0.8 percent at a monthly rate) in February, according to estimates released today by the U.S. Bureau of Economic Analysis. Disposable personal income (DPI)—personal income less personal current taxes—increased $191.6 billion (0.9 percent) and personal consumption expenditures (PCE) increased $87.8 billion (0.4 percent).The February PCE price index increased 2.5 percent year-over-year (YoY), unchanged from 2.5 percent YoY in January, and down from the recent peak of 7.2 percent in June 2022.
Personal outlays—the sum of PCE, personal interest payments, and personal current transfer payments—increased $118.4 billion in February. Personal saving was $1.02 trillion in February and the personal saving rate—personal saving as a percentage of disposable personal income—was 4.6 percent.
From the preceding month, the PCE price index for February increased 0.3 percent. Excluding food and energy, the PCE price index increased 0.4 percent.
From the same month one year ago, the PCE price index for February increased 2.5 percent. Excluding food and energy, the PCE price index increased 2.8 percent from one year ago.
emphasis added
The PCE price index, excluding food and energy, increased 2.8 percent YoY, up from 2.7 percent in January, and down from the recent peak of 5.6 percent in February 2022.
The following graph shows real Personal Consumption Expenditures (PCE) through February 2025 (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 above expectations. PCE was at expectations.
The following graph shows real Personal Consumption Expenditures (PCE) through February 2025 (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 above expectations. PCE was at expectations.
Inflation was above expectations.
Using the two-month method to estimate Q1 real PCE growth, real PCE was increasing at a 0.9% annual rate in Q1 2024. (Using the mid-month method, real PCE was increasing at 0.2%). This suggests weak PCE growth in Q1.
