Personal and Disposable Income Rose in September

Personal Income and disposable personal income rose 0.5% in September.

Personal income increased $53.0 billion, or 0.5 percent, and disposable personal income (DPI) increased $49.3 billion, or 0.5 percent, in September, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $11.6 billion, or 0.1 percent. In August, personal income increased $47.2 billion, or 0.4 percent, DPI increased $46.4 billion, or 0.5 percent, and PCE increased $15.3 billion, or 0.2 percent, based on revised estimates.

Personal outlays also increased in September, but by less than the increase in August.

Personal outlays — PCE, personal interest payments, and personal current transfer payments increased $15.3 billion in September, compared with an increase of $19.1 billion in August.

What does this mean? Well, growth personal outlays for the year peaked in July of this year and have declined in August and September. Consumer spending is one of the primary drivers of growth, so a decline here would likely translate into lower growth, and if the decline continues and even becomes negative future growth would likely decline as well. So what will we see in the next few months, a continuation of the decline or a leveling off or rebound? That depends, at least to some extent, on what the Fed does. Higher interest rates will likely mean further declines in the housing market as well as higher interest rates for those with adjustable rate mortgages. This would likely mean more “belt tightening” by consumers. Lower rates could help mitigate this effect and either slow the decline or even see a return to growth in consumer spending.

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Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.


  1. Tano says:

    How was this increase in personal income distributed across the income spectrum?

  2. madmatt says:

    It is also back to school time which swings it upwards every year!!!!

  3. Steve Verdon says:

    How was this increase in personal income distributed across the income spectrum?

    I don’t know, I don’t think BEA gathers such data. I believe the Census Deptarment does, but they tend to lag in terms of data availability.


    The BEA adjusts for such seasonal effects.

  4. Dpi says:

    Yes, but Americans must rise up and stop this………….

    Sure he did’nt mean Plame and the runaway spending on federal employees on little journeys because daddy was in the Air Force and how that destroys our national security when other countires know this and get pissed off they have to take care of another American?