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Personal Income Unexpectedly Rose 0.4% in July, Driven By Economic Reopening

Consumer Spending Stronger than Initially Reported in June, Beats Expectations in July

American flag and U.S. dollar financial and economy concept. (Photo: AdobeStock)

Washington, D.C. (PPD) — Personal income unexpectedly rose $874.2 billion (4.2%) in July, beating the forecast, and personal outlays rose $270.6 billion. Personal saving remained very high, but prior gains in personal consumption expenditures (PCE), also known as consumer spending, were stronger than initially reported.

Forecasts for personal income ranged from a low of -2.0% to a high of 1.2%, with the consensus -0.2%. Forecasts for personal outlays ranged from a low of 0.7% to a high of 4.5%, with the consensus 1.5%.

“The increase in personal income in July was more than accounted for by compensation of employees as portions of the economy continued to reopen,” the U.S. Bureau of Economic Analysis (BEA) said in a statement.

Disposable personal income (DPI) rose $39.9 billion (0.2%) and personal consumption expenditures (PCE) gained $267.6 billion (1.9%). Real DPI fell 0.1% in July and Real PCE gained 1.6%. The PCE price index rose 0.3%. Excluding food and energy, the PCE price index rose 0.3%.

The personal saving rate — personal saving as a percentage of disposable personal income — fell to 17.8%. That’s down from a record high 33% in April.

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PPD Business Staff

PPD Business, the economy-reporting arm of People's Pundit Daily, is "making sense of current events." We are a no-holds barred, news reporting pundit of, by, and for the people.

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