US consumers’ personal consumption expenditures, which essentially reflect consumer spending, increased $56.4 billion, or 0.6%, in January 2009, according to the Bureau of Economic Analysis of the US Department of Commerce.
The BEA also estimates that during the month, personal income increased $44.8 billion, or 0.4%, and disposable personal income increased $183.0 billion, or 1.7%.
These figures represent a potentially encouraging increase since December 2008, when personal consumption expenditures decreased $101.2 billion, or 1%, personal income decreased $24 billion, or 0.2%, and disposable personal income decreased $17.8 billion, or 0.2%, based on revised estimates, writes Retailer Daily.
According to Forbes, Wall Street had expected personal spending to only gain 0.4% and personal income to drop 0.2%.
The BEA attributed the change in personal income to several special factors:
? Pay raises for federal civilian and military personnel boosted government wage and salary disbursements.
- Cost-of-living adjustments to several federal transfer payment programs boosted personal current transfer receipts.
- The January change was reduced by annual adjustments to personal contributions for government social insurance (a subtraction in calculating personal income), by the adjustment to private wages and salaries for bonus payments, and by lump-sum social security benefit payments which had boosted December personal income.
Excluding these special factors, personal income increased $24.2 billion, or 0.2 percent, in January, after decreasing $31.4 billion, or 0.3 percent, in December 2008.
Consumers also managed to increase personal saving to $545.5 billion in January 2009, compared with $416.8 billion in December 2008. Personal saving as a percentage of disposable personal income was 5% in January, compared with 3.9% in December.
For the entire year 2008, personal consumption expenditures increased 3.6%, personal income increased 3.8%, disposable personal income increased 4.7%, and personal saving as a percentage of disposable personal income increased 1.2%.
Last week, the Conference Board reported some discouraging consumer news for February 2009. The Consumer Confidence Index reached an all-time low of 25.0 in February, a drop of 12.4 points from the previous historic low of 37.4 reached in January.