Personal income increased $40.7 billion (0.2 percent) in December according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $30.6 billion (0.2 percent) and personal consumption expenditures (PCE) increased $46.6 billion (0.3 percent).

Real DPI decreased 0.1 percent in December and Real PCE increased 0.1 percent. The PCE price index increased 0.3 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

The increase in personal income in December primarily reflected increases in compensation of employees and personal interest income that were partially offset by a decrease in farm proprietors’ income (table 3). Farm proprietors’ income decreased $36.2 billion in December, which included a decrease in subsidy payments associated with the Department of Agriculture’s Market Facilitation Program.

The $6.8 billion increase in real PCE in December reflected an increase of $2.5 billion in spending on goods and a $4.4 billion increase in spending on services. Within goods, spending on prescription drugs was the leading contributor to the increase. Within services, the largest contributor to the increase was spending on health care. Detailed information on monthly real PCE spending can be found on Table 2.3.6U.

Personal outlays increased $51.5 billion in December (table 3). Personal saving was $1.28 trillion in December and the personal saving rate, personal saving as a percentage of disposable personal income, was 7.6 percent.