Disposable personal income surged 0.9% in January, more than double the pace of December. Almost all of that acceleration in income growth was due to preliminary estimates that the Bureau of Economic Analysis (BEA) made to account for the tax cuts passed in December. The numbers included one-time bonuses, estimated at $30 billion, which will fall out of the data for February. The one-time bonuses accounted for less than 0.2% of total income.The data for the previous month were revised up slightly, underscoring that the economy ended 2017 on a firm footing. After adjusting for inflation, disposable incomes rose 0.6% for the month.
Personal consumption expenditures actually fell 0.1% after adjusting for inflation in the month of January; December data were revised up slightly. The weakness was heavily concentrated in durable goods, particularly vehicle sales, which accounted for the bulk of the decline in January. Read More »