Personal Income Jumped in January, But It's a One-Time Deal


Personal income rose 0.6% in January. Real income rose 0.5%. Spending rose 0.2% and real spending only 0.1%

Let's step away from the coronavirus and put a spotlight on income and spending from the BEA report Personal Income and Outlays for January 2020.

  • Personal income increased $116.5 billion (0.6 percent) in January.
  • Disposable personal income (DPI) increased $101.4 billion (0.6 percent).
  • Personal consumption expenditures (PCE) increased $29.6 billion (0.2 percent).
  • Real DPI increased 0.5 percent in January and Real PCE increased 0.1 percent.
  • The PCE price index increased 0.1 percent.
  • Excluding food and energy, the PCE price index increased 0.1 percent.

Minimum Wage Hikes

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Workers in Majority of U.S. States had a Minimum Wage Increase in 2020. The biggest impact was in California, New York City, and District of Columbia.

  • California raised the minimum wage rates by $1 on January 1 ($12.00 per hour for employers with 25 employees or less, and $13.00 per hour for employers with 26 employees or more).
  • New York City is $15.00 per hour.
  • Washington D.C. rose from $14.00 per hour to $15.00.
  • Most employers and employees are subject to a higher federal minimum wage rate of $7.25 per hour but Georgia and Wyoming have minimum wages of $5.15 per hour.

This 0.6% jump in pay is one-time January only impact unlikely to be repeated throughout the year.

Mike "Mish" Shedlock​

Comments (3)
No. 1-2

Think i heard trump claimed credit while trying to block it

Tony Bennett
Tony Bennett

"Personal income increased $116.5 billion (0.6 percent) in January."


Two things.

  1. Wage and salary gain less than half of this amount.

  2. Personal transfer receipts from fedgov to individuals greater than wage and salary gain.

One (main) reason why fedgov deficits run almost $100 billion ... A MONTH on average.

Global Economics