US Personal Income and Spending Rise, Savings at 3.9%

Personal income in the United States increased by $116.8 billion in March, representing a 0.5% monthly gain, according to the latest data from the US Bureau of Economic Analysis.

Disposable personal income (DPI), income after taxes, also rose by $102.0 billion, matching the 0.5% monthly increase.

Consumer Spending Accelerates

Household spending, measured through personal consumption expenditures (PCE), saw a strong increase of $134.5 billion, or 0.7% in March. This reflects continued strength in consumer activity despite ongoing economic uncertainty.

• Spending on goods rose by $54.5 billion,
• Spending on services increased by $79.9 billion.

Total personal outlays, which include PCE, interest payments, and transfer payments, climbed by $136.6 billion.

Savings Edge Higher

The personal saving level in March reached $872.3 billion, with the personal saving rate, the percentage of disposable income that households save, holding at 3.9%. This marks a stable position as spending continues to grow alongside rising income.

Income Gains Driven by Labor Market Strength

The increase in personal income was primarily fueled by higher employee compensation and proprietors’ income (earnings from self-employment), pointing to continued resilience in the labor market and small business activity.

PCE Inflation Slows Slightly

Price pressures showed a slight easing in March:

• The PCE price index edged down by less than 0.1% compared to February,
• Core PCE inflation, which excludes food and energy, also decreased by less than 0.1%.

Over the past 12 months, the PCE price index rose by 2.3%, while core PCE inflation stood at 2.6%, indicating continued moderation in overall inflation and potentially supporting a more flexible monetary policy outlook going forward.

Source: US Bureau of Economic Analysis