Real personal disposable income recovered in February, following a volatile December and January. Real disposable personal increased 0.68 percent to reach $10.3 billion, close to November levels (month-to-month changes not pictured). Year-over-year, personal disposable income was up .92% in February.

Real consumer spending increased 0.29 percent in February. Durable goods increased 06 percent over the month, nondurables 0.48 percent and spending on services increased 0.27 percent.

Real Personal Consumption Expenditures, seasonally adjusted, year-over-year percent change

Additional detail:

  • The spike in December reflected accelerated bonus and dividend payments, presumably made in anticipation of tax hikes.
  • With the expiration of the payroll tax holiday, the amount of money withheld from paychecks for government social insurance and personal taxes increased in January, contributing to the drop in personal disposable income.
  • Real disposable personal income is personal income minus taxes and adjusted for inflation.