The Bureau of Economic Analysis reports that in December 2021 personal income increased by 0.3%. The rise was short of expectations.
According to the Daily FX report, analysts expected personal income to climb by 0.5%. At the same time, personal consumption expenditures were in line with forecasts.
Previously, experts had revised the income and expenditure figures for November to 0.4% from 0.5% and from 0.6% to 0.4% respectively. In December 2021, US disposable income was up by 0.2% compared to November. However, real disposable income, expressed in terms of 2012 dollars, fell by 0.2%.
Notably, disposable income reflects the purchasing power of the population. The economic indicator includes wages, business revenue, pensions, benefits, social security, and insurance payments, dividends, interest income from property, and profit received from the sale of shares and real estate. This list does not contain compulsory payments, such as taxes.
Americans' personal consumption expenditure includes spending on durable and non-durable goods, as well as services. An increase in personal spending is sure to facilitate economic growth. Besides, it indicates a further rise in the country’s GDP. On the contrary, it also signals an acceleration of inflation.
