EMBARGOED UNTIL RELEASE AT 8:30 A.M. EST, Thursday, March 1, 2018
BEA 18—09

* See the navigation bar at the right side of the news release text for links to data tables,
contact personnel and their telephone numbers, and supplementary materials.

Technical: Brian Smith (301) 278-9625 (Personal Income) piniwd@bea.gov
  Harvey Davis (301) 278-9086 (PCE) pce@bea.gov
  Mark Ludwick (301) 278-9090 (Taxes and Government) Mark.Ludwick@bea.gov
Media: Jeannine Aversa (301) 278-9003   Jeannine.Aversa@bea.gov
Personal income increased $64.7 billion (0.4 percent) in January according to estimates released
today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $134.8 billion
(0.9 percent) and personal consumption expenditures (PCE) increased $31.2 billion (0.2 percent).

Real DPI increased 0.6 percent in January and Real PCE decreased 0.1 percent. The PCE price index
increased 0.4 percent. Excluding food and energy, the PCE price index increased 0.3 percent.

                                                               2017                  2018
                                                Sept.     Oct.     Nov.     Dec.     Jan.
                                                   Percent change from preceding month
Personal income:
 Current dollars                                 0.5      0.4      0.3      0.4      0.4
Disposable personal income:
 Current dollars                                 0.4      0.3      0.3      0.4      0.9
 Chained (2009) dollars                          0.0      0.2      0.1      0.2      0.6
Personal consumption expenditures (PCE):
 Current dollars                                 1.0      0.3      0.7      0.4      0.2
 Chained (2009) dollars                          0.6      0.2      0.5      0.2     -0.1
Price indexes:
 PCE                                             0.4      0.2      0.2      0.1      0.4
 PCE, excluding food and energy                  0.2      0.2      0.1      0.2      0.3

Price indexes:                                    Percent change from month one year ago
 PCE                                             1.7      1.6      1.7      1.7      1.7
 PCE, excluding food and energy                  1.4      1.5      1.5      1.5      1.5

        Quarterly Census of Employment and Wage Data Included in the Third Quarter of 2017

This news release includes revised estimates of wages and salaries, personal taxes, and contributions
for government social insurance for July through September 2017 (third quarter). These estimates reflect
the incorporation of the most recently available third-quarter wage and salary tabulations from the
Bureau of Labor Statistics’ Quarterly Census of Employment and Wages (QCEW) program.

                                Impacts of the Tax Cuts and Jobs Act

Increases in the January estimates of disposable personal income and the personal saving rate mostly
result from a decrease in personal current taxes, which reflect the effects of the Tax Cuts and Jobs Act (TCJA).
BEA estimates that the TCJA reduced personal current taxes by $115.5 billion at an annual rate.  BEA’s
preliminary estimates of the effects of the TCJA are based in part on projections prepared by the Treasury
Department’s Office of Tax Analysis.  For more information on the TCJA’s effects on personal taxes, please
see “How will the 2017 Tax Cuts and Jobs Act impact personal taxes?”

January estimates of wages and salaries were adjusted up by $30.0 billion to account for bonuses paid by
businesses that are not included in the monthly source data in the Current Employment Statistics from the
Bureau of Labor Statistics. This adjustment reflects one-time bonuses reported publicly in response to the
TCJA and was derived based on news releases covering estimates of the number of employees receiving bonuses
and payment amounts. BEA will release QCEW-based estimates of wages and salaries, that will include both
regular and TCJA-related bonus activity, for the first quarter of 2018 on July 27, 2018.

The increase in personal income in January primarily reflected increases in wages and salaries and Social
Security benefits that were partially offset by an increase in contributions for government social insurance,
a subtraction in the calculation of personal income (table 3).

The $17.0 billion decrease in real PCE in January reflected a decrease of $24.6 billion in spending for
goods and a partially offsetting $4.8 billion increase in spending for services (table 7). Within goods,
new motor vehicle sales was the leading contributor to the decrease. Detailed information on monthly real
PCE spending can be found in Table 2.3.6U.

Personal outlays increased $33.7 billion in January (table 3). Personal saving was $464.4 billion in January
and the personal saving rate, personal saving as a percentage of disposable personal income, was 3.2 percent
(table 1).

                                2017 Personal Income and Outlays

Personal income (table 6) increased 3.1 percent in 2017 (that is, from the 2016 annual level to the 2017 annual
level), compared with an increase of 2.4 percent in 2016. DPI increased 2.9 percent in 2017 compared with an
increase of 2.6 percent in 2016. In 2017, PCE increased 4.5 percent, compared with an increase of 4.0 percent
in 2016.

Real DPI increased 1.2 percent in 2017, compared with an increase of 1.4 percent in 2016. Real PCE (table 8)
increased 2.7 percent, the same increase as in 2016.

                                Updates to Personal Income and Outlays

Estimates have been updated for July through December. The percent change from the preceding month for current-dollar
personal income, and for current-dollar and chained (2009) dollar DPI and PCE  -- revised and as published in last
month's release -- are shown below.

                                                        Change from preceding month
                                               November                                   December
                                Previous   Revised   Previous   Revised   Previous   Revised   Previous   Revised
                               (Billions of dollars)      (Percent)      (Billions of dollars)     (Percent)
Personal income:
 Current dollars                    50.4      56.1        0.3       0.3       58.7      63.2        0.4       0.4
Disposable personal income:
 Current dollars                    37.6      39.9        0.3       0.3       48.0      52.2        0.3       0.4
 Chained (2009) dollars              2.6       8.8        0.0       0.1       28.1      27.4        0.2       0.2
Personal consumption expenditures:
 Current dollars                   101.9      92.0        0.8       0.7       54.2      53.1        0.4       0.4
 Chained (2009) dollars             61.1      56.4        0.5       0.5       34.4      29.3        0.3       0.2

                                Next release:  March 29, 2018 at 8:30 A.M. EDT
                                 Personal Income and Outlays:  February 2018

                                      Additional Information


Additional Resources available at www.bea.gov:

•	Stay informed about BEA developments by reading the BEA blog, signing up for BEA’s email
        subscription service, or following BEA on Twitter @BEA_News.
•	Historical time series for these estimates can be accessed in BEA’s Interactive Data Application.
•	Access BEA data by registering for BEA’s Data Application Programming Interface (API).
•	For more on BEA’s statistics, see our monthly online journal, the Survey of Current Business.
•	BEA's news release scheduleNIPA Handbook:  Concepts and Methods of the U.S. National Income and Product Accounts


Personal income is the income received by, or on behalf of, all persons from all sources:  from
participation as laborers in production, from owning a home or business, from the ownership of
financial assets, and from government and business in the form of transfers. It includes income from
domestic sources as well as the rest of world. It does not include realized or unrealized capital gains or

Disposable personal income is the income available to persons for spending or saving. It is equal to
personal income less personal current taxes.

Personal consumption expenditures (PCE) is the value of the goods and services purchased by, or on the
behalf of, “persons” who reside in the United States.

Personal outlays is the sum of PCE, personal interest payments, and personal current transfer payments.

Personal saving is personal income less personal outlays and personal current taxes.

The personal saving rate is personal saving as a percentage of disposable personal income.

Current-dollar estimates are valued in the prices of the period when the transactions occurred—that is,
at “market value.” Also referred to as “nominal estimates” or as “current-price estimates.”

Real values are inflation-adjusted estimates—that is, estimates that exclude the effects of price changes.

For more definitions, see the Glossary: National Income and Product Accounts.

Statistical conventions

Annual rates. Monthly and quarterly values are expressed at seasonally-adjusted annual rates (SAAR).
Dollar changes are calculated as the difference between these SAAR values. For detail, see the FAQ
“Why does BEA publish estimates at annual rates?”

Month-to-month percent changes are calculated from unrounded data and are not annualized.

Quarter-to-quarter percent changes are calculated from unrounded data and are displayed at annual
rates. For detail, see the FAQ “How is average annual growth calculated?”

Quantities and prices. Quantities, or “real” volume measures, and prices are expressed as index
numbers with a specified reference year equal to 100 (currently 2009). Quantity and price indexes are
calculated using a Fisher-chained weighted formula that incorporates weights from two adjacent
periods (quarters for quarterly data and annuals for annual data). “Real” dollar series are calculated by
multiplying the published quantity index by the current dollar value in the reference year (2009) and
then dividing by 100. Percent changes calculated from real quantity indexes and chained-dollar levels
are conceptually the same; any differences are due to rounding.

Chained-dollar values are not additive because the relative weights for a given period differ from those
of the reference year.