EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, FRIDAY, October 31, 2008
BEA 08-49
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PERSONAL INCOME AND OUTLAYS
September 2008
Personal income increased $24.5 billion, or 0.2 percent, and disposable personal income (DPI)
increased $25.7 billion, or 0.2 percent, in September, according to the Bureau of Economic Analysis.
Personal consumption expenditures (PCE) decreased $33.6 billion, or 0.3 percent. In August, personal
income increased $44.8 billion, or 0.4 percent, DPI decreased $107.7 billion, or 1.0 percent, and PCE
increased $4.5 billion, or less than 0.1 percent, based on revised estimates. Excluding the rebate
payments under the Economic Stimulus Act of 2008, DPI increased $30.3 billion, or 0.3 percent in
September, and increased $44.0 billion, or 0.4 percent in August.
Real DPI increased 0.1 percent in September, in contrast to a decrease of 1.0 percent in August.
Real PCE decreased 0.4 percent, in contrast to an increase of less than 0.1 percent.
2008
May June July Aug. Sept.
(Percent change from preceding month)
Personal income, current dollars 1.9 0.1 -0.8 0.4 0.2
Disposable personal income:
Current dollars 5.7 -1.8 -1.0 -1.0 0.2
Chained (2000) dollars 5.3 -2.5 -1.6 -1.0 0.1
Personal consumption expenditures:
Current dollars 0.7 0.5 0.0 0.0 -0.3
Chained (2000) dollars 0.2 -0.2 -0.6 0.0 -0.4
The September estimate of personal income reflects the effects of Hurricane Ike, which struck the
Gulf Coast region, especially impacting coastal Texas and Louisiana, on September 13, 2008. Rental
income of persons was reduced by about $27 billion (at an annual rate) and proprietors' income was
reduced by about $9 billion (at an annual rate) to reflect uninsured losses of residential and business
property. "Other current transfer receipts from business (net)" was boosted by about $27 billion (at an
annual rate) to reflect insurance benefits paid to persons. The net effect of these adjustments was to
lower September personal income $8.5 billion. Because other effects of the hurricane were embedded
in BEA's source data and could not be separately identified, BEA did not attempt to quantify their impact.
For more information on how disasters are treated in the national accounts, see FAQs on "Disasters" on BEA's Web site.
Wages and salaries
Private wage and salary disbursements increased $0.3 billion in September, compared with an
increase of $24.1 billion in August. Goods-producing industries' payrolls decreased $4.0 billion, in
contrast to an increase of $5.1 billion; manufacturing payrolls decreased $2.6 billion, compared with
a decrease of $1.3 billion. Services-producing industries' payrolls increased $4.3 billion, compared
with an increase of $19.0 billion. Government wage and salary disbursements increased $4.0
billion, compared with an increase of $4.6 billion.
Other personal income
Supplements to wages and salaries increased $1.2 billion in September, compared with an increase
of $3.1 billion in August.
Proprietors' income decreased $3.4 billion in September, compared with a decrease of $10.8
billion in August. Farm proprietors' income decreased $3.5 billion, compared with a decrease of
$3.3 billion. Nonfarm proprietors' income increased $0.1 billion, in contrast to a decrease of $7.5
billion. Nonfarm proprietors' income was reduced $8.8 billion (at an annual rate) in September to
reflect uninsured losses of business property from the impact of Hurricane Ike. (Proprietors' income
is reported net of such losses.)
Rental income of persons decreased $24.0 billion in September, in contrast to an increase of
$2.4 billion in August. Rental income was reduced $26.6 billion (at an annual rate) in September to
reflect uninsured losses of residential property from the impacts of the hurricane.
Personal income receipts on assets (personal interest income plus personal dividend income)
increased $9.1 billion in September, compared with an increase of $8.9 billion in August.
Personal current transfer receipts increased $37.3 billion in September, compared with an
increase of $15.6 billion in August. Personal current transfer receipts was boosted $26.9 billion (at
an annual rate) in September to reflect increases in insurance benefits paid to persons for damage to
insured property from the impact of Hurricane Ike. The September and August changes reflected
provisions of the Supplemental Appropriations Act of 2008, which provided up to 13 weeks of
additional unemployment compensation benefits to those who exhausted their regular
unemployment benefits. The additional unemployment benefits boosted the level of personal current
transfer receipts by $19.2 billion in September, by $17.6 billion in August, and by $4.3 billion in
July. The September and August changes also reflected provisions of the Economic Stimulus Act of
2008, which boosted the level of personal current transfer receipts by $3.9 billion (at an annual rate)
in September, by $5.1 billion in August, and by $4.2 billion in July (see the box on page 6).
Contributions for government social insurance -- a subtraction in calculating personal income --
decreased $0.1 billion in September, in contrast to an increase of $3.2 billion in August.
Personal current taxes and disposable personal income
Personal current taxes decreased $1.1 billion in September, in contrast to an increase of $152.4
billion in August. Provisions of the Economic Stimulus Act reduced the level of personal taxes by
$3.9 billion (at an annual rate) in September, by $7.3 billion in August, and by $159.9 billion in
July. The reduction in current personal taxes reflected rebate payments to eligible individual
taxpayers (see the box on page 6). Disposable personal income (DPI) -- personal income less
personal current taxes -- increased $25.7 billion, or 0.2 percent, in September, in contrast to a
decrease of $107.7 billion, or 1.0 percent, in August.
Personal outlays and personal saving
Personal outlays -- PCE, personal interest payments, and personal current transfer payments
decreased $32.0 billion in September, in contrast to an increase of $6.0 billion in August. PCE
decreased $33.6 billion, in contrast to an increase of $4.5 billion.
Personal saving -- DPI less personal outlays -- was $140.3 billion in September, compared with
$82.5 billion in August. Personal saving as a percentage of disposable personal income was 1.3
percent in September, compared with 0.8 percent in August. Saving from current income may be
near zero or negative when outlays are financed by borrowing (including borrowing financed
through credit cards or home equity loans), by selling investments or other assets, or by using
savings from previous periods. For more information, see the FAQs on "Personal Saving" on
BEA's Web site. For a comparison of personal saving in BEA's national income and product
accounts with personal saving in the Federal Reserve Board's flow of funds accounts, go to
http://www.bea.gov/bea/dn/nipaweb/Nipa-Frb.asp.
Real DPI and real PCE
Real DPI -- DPI adjusted to remove price changes -- increased 0.1 percent in September, in
contrast to a decrease of 1.0 percent in August. Excluding the rebate payments under the Economic
Stimulus Act of 2008, which increased government social benefit payments and reduced personal
current taxes, real DPI increased 0.2 percent in September, and increased 0.4 percent in August.
Real PCE -- PCE adjusted to remove price changes -- decreased 0.4 percent in September, in
contrast to an increase of less than 0.1 percent in August. Purchases of durable goods decreased 2.9
percent, in contrast to an increase of 1.9 percent. Purchases of motor vehicles and parts accounted
for most of the decrease in September and more than accounted the increase in August. Purchases of
nondurable goods decreased 0.8 percent in September, compared with a decrease of 0.3 percent in
August. Purchases of services increased 0.2 percent, in contrast to a decrease of 0.1 percent.
PCE price index - - The price index for PCE increased 0.1 percent in September, compared
with an increase of less than 0.1 percent in August. The PCE price index, excluding food and
energy increased 0.2 percent in September, the same increase as in August.
Revisions
Estimates have been revised for July and August. Changes in personal income, current-dollar
and chained (2000) dollar DPI, and current-dollar and chained (2000) dollar PCE for July and
August -- revised and as published in last month's release -- are shown below.
Change from preceding month
July August
Previous Revised Previous Revised Previous Revised Previous Revised
(Billions of dollars) (Percent) (Billions of dollars) (Percent)
Personal Income:
Current dollars..................... -69.0 -92.7 -0.6 -0.8 61.5 44.8 0.5 0.4
Disposable personal income:
Current dollars..................... -91.0 -106.6 -0.8 -1.0 -93.3 -107.7 -0.9 -1.0
Chained (2000) dollars.............. -130.5 -140.5 -1.5 -1.6 -78.8 -89.3 -0.9 -1.0
Personal consumption expenditures:
Current dollars..................... 14.2 2.5 0.1 0.0 3.9 4.5 0.0 0.0
Chained (2000) dollars.............. -41.4 -48.4 -0.5 -0.6 0.3 1.9 0.0 0.0
Economic Stimulus Act of 2008
The Economic Stimulus Act of 2008 provides rebate payments to eligible individual taxpayers as
well as tax reductions for businesses. For individuals, the amount of the rebate is determined by information
reported on tax filings for 2007 and is based on filing status, level of adjusted gross income, and the number
of qualifying children. According to the Joint Committee on Taxation and the Congressional Budget Office,
rebates to individuals are expected to total $106.7 billion for fiscal year 2008. The majority of rebates were
sent during the initial round of payments, which began April 28, 2008, and continued on a weekly basis
through mid-July 2008.
In the NIPAs, rebates for residents of the 50 states and the District of Columbia are recorded as either
an offset to personal current taxes or as a social benefit payment to persons. Rebates for individuals with
tax liabilities that exceed the rebate amount are treated as an offset to personal current taxes in the NIPAs.
Rebates for individuals who pay no income taxes (or for whom the rebate would exceed the amount of the
income taxes they do pay) are treated as a government social benefit payment to persons in the NIPAs.
BEA's national, international, regional, and industry estimates; the Survey of Current Business;
and BEA news releases are available without charge on BEA's Web site at www.bea.gov. By visiting
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Next release -- November 26, 2008, at 8:30 A.M. EST for Personal Income and Outlays for October.
