Personal Income Up 0.1%, Spending Up 0.6%: What's the Problem?


Personal Income is up 0.1%, spending is up 0.6%. Real Disposable Income is up 0.1%, real spending is up 0.4%.

The BEA's Personal Income and Outlays report for July 2019 shows consumers keep spending well beyond income increases.

  • Personal income increased $23.9 billion (0.1 percent) in July according to estimates released today by the Bureau of Economic Analysis.
  • Disposable personal income (DPI) increased $44.4 billion (0.3 percent) and personal consumption expenditures (PCE) increased $93.1 billion (0.6 percent).
  • Real DPI increased 0.1 percent in July and Real PCE increased 0.4 percent.
  • The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.2 percent.


The increase in personal income in July primarily reflected increases in compensation of employees and government social benefits to persons that were partially offset by a decrease in personal interest income.

Increased Spending

Within goods, recreational goods and vehicles was the leading contributor to the increase. Within services, the largest contributor to the increase was spending for household electricity and gas.

Auto and SUV sales have not been strong.

I smell revisions.

The bond market does not seem very convinced either. The 30-year long bond yield is up a mere 1 basis point and the 10-year yield is flat.

Mike "Mish" Shedlock

Comments (11)
No. 1-5


Interesting about the utility costs. I'd like to see a chart comparing utility costs with average costs of everything else. Seems to me electricity, gas, and water & sewer costs have gotten a lot more expensive, and those are not things easily done without.


"Income Up 0.1%, Spending Up 0.6%"
Isn't that called 'LEVERAGE" ?


Middle class is so screwed by lack of low-risk yield that they are unable to care about taking full responsibility for their finances long-term. What is the point of saving an extra $100 per month when the prices of housing, college, stocks, and health care rise as fast or faster than CD's yield.


This isn't a one-month event. In most of the prior months in the table expenditures have risen faster than income. In time it will have to reverse. One of the most concerning things is the rise of gas and electric as I expect these costs to continue to rise quickly.


I don't understand tygovt politburo says inflation is to low

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