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February 28, 2025US PERSONAL INCOME AND OUTLAY, JANUARY 2025 Month over month (January 2025 vs December 2024, seasonally adjusted)
The US Bureau of Economic Analysis reported that US personal income increased by $221.9 billion (+0.88%). Employee compensation was up $66.6 billion (+0.44%). Personal disposable income was up $194.2 billion (+0.88%) while personal consumption expenditures (PCE) declined by $30.7 billion (-0.15%).
US personal savings increased by $247.0 billion (+32.22%).
US personal income is calculated as the sum of employee compensation ($15.36 trillion), proprietors' income ($2.08 trillion), rental income ($1.09 trillion), receipts on assets ($4.02 trillion) and current transfers received ($4.74 trillion), less contributions to social insurance programs ($1.94 trillion). Personal income ($25.35 trillion) less personal current taxes ($3.14 trillion) equals disposable income ($22.21 trillion).
The outlay of US personal disposable income consists of personal consumption expenditures ($20.38 trillion), interest payments ($0.56 trillion) and current transfers paid ($0.25 trillion) with personal savings ($1.01 trillion) accounting for the remaining amount.
Trends
US personal consumption expenditures declined for the first time since March 2023 while personal income continued to grow.
Growth in the price index for personal consumption expenditures (all items) was 2.5% year-over-year. Year-over-year growth in the price index for all items excluding food and energy declined to 2.6%, and outpaced all items PCE inflation for the 23rd consecutive month.
With growth in consumer spending lagging personal income, the US personal savings rate increased more than a full percentage point to 4.6% of disposable personal income as it did in January 2024.
Year-over-year (January 2025 vs January 2024)
In January 2025, US personal income increased by 4.6% from the same month in 2024. There were gains from all income sources led by growth in current transfers received (+7.4%). With an increase in personal current taxes (+6.4%), year-to-date growth in personal disposable income (+4.4%) is slower than growth in total personal income (+4.6%).
US interest payments increased by 7.1% over January 2024. This outpaced by a 5.6% increase in personal consumption expenditures.
US Bureau of Economic Analysis. Press release, January 2025; Data retrieved Federal Bank of St Louis, Table 2.6. Personal Income and Its Disposition, Monthly NIPA
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