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March 28, 2025US PERSONAL INCOME AND OUTLAY, FEBRUARY 2025 Month over month (February vs January 2025, seasonally adjusted)
The US Bureau of Economic Analysis reported that US personal income increased by $194.7 billion (+0.8%). Employee compensation was up $70.3 billion (+0.5%). Personal disposable income was up $191.6 billion (+0.9%) while personal consumption expenditures (PCE) grew by $87.8 billion (+0.4%).
US personal savings increased by $73.3 billion (+7.7%).
US personal income is calculated as the sum of employee compensation ($15.40 trillion), proprietors' income ($2.05 trillion), rental income ($1.09 trillion), receipts on assets ($4.02 trillion) and current transfers received ($4.82 trillion), less contributions to social insurance programs ($1.95 trillion). Personal income ($25.44 trillion) less personal current taxes ($3.14 trillion) equals disposable income ($22.30 trillion).
The outlay of US personal disposable income consists of personal consumption expenditures ($20.44 trillion), interest payments ($0.56 trillion) and current transfers paid ($0.28 trillion) with personal savings ($1.02 trillion) accounting for the remaining amount.
Trends
US personal consumption expenditures grew in February after the first decline 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 was 2.8%, and outpaced all items PCE inflation for the 24th consecutive month.
With growth in consumer spending lagging personal income, the US personal savings rate increased to 4.6% of disposable personal income in February 2025.
Year-to-date (January-February 2024 vs January-February 2025)
In the first two months 2025, US personal income increased by 2.8% from the same period in 2024. There were gains from all income sources led by growth in current transfers received (+5.1%). With an increase in personal current taxes (+3.5%), year-to-date growth in personal disposable income (+2.7%) is slower than growth in total personal income (+2.8%).
US interest payments increased by 1.9% from the first two months of 2024 to January-February 2025. This outpaced by a 2.9% increase in personal consumption expenditures.
US Bureau of Economic Analysis. Press release, February 2025; Data retrieved Federal Bank of St Louis, Table 2.6. Personal Income and Its Disposition, Monthly NIPA