News Release
Personal Income and Outlays, July 2008
July 2008
Personal income decreased $89.9 billion, or 0.7 percent, in July, in contrast to an increase of $7.4
billion, or 0.1 percent, in June and an increase of $218.0 billion, or 1.8 percent, in May. Disposable
personal income (DPI) decreased $114.7 billion, or 1.1 percent, in July, compared with a decrease of
$208.0 billion, or 1.9 percent, in June and an increase of $595.9 billion, or 5.7 percent in May. Personal
consumption expenditures (PCE) increased $24.1 billion, or 0.2 percent, in July, compared with an
increase of $65.5 billion, or 0.6 percent, in June. The pattern of changes in income reflects the pattern of
payments associated with the Economic Stimulus Act of 2008 (see page 2).
Real DPI decreased 1.7 percent in July, compared with a decrease of 2.6 percent in June. Real PCE
decreased 0.4 percent, compared with a decrease of 0.1 percent.
2008
Mar. Apr. May June July
(Percent change from preceding month)
Personal income, current dollars 0.4 0.2 1.8 0.1 -0.7
Disposable personal income:
Current dollars 0.4 0.3 5.7 -1.9 -1.1
Chained (2000) dollars 0.1 0.1 5.2 -2.6 -1.7
Personal consumption expenditures:
Current dollars 0.6 0.4 0.8 0.6 0.2
Chained (2000) dollars 0.3 0.1 0.3 -0.1 -0.4
In April, May, June, and July, changes in disposable personal income (DPI) -- personal
income less personal current taxes -- were affected by the Economic Stimulus Act of 2008. The
federal government issued rebate payments of $1.9 billion in April ($23.3 billion at an annual
rate), of $48.1 billion in May ($577.1 billion at an annual rate), of $27.9 billion in June ($334.4
billion at an annual rate), and of $13.7 billion in July ($164.1 billion at an annual rate). These
rebates increased government social benefit payments and reduced personal current taxes. The
rebates boosted the change in DPI $23.3 billion in April and $553.8 billion in May, and reduced
the change in DPI by $242.7 billion in June and by $170.3 billion in July. Excluding these rebate
payments, which are discussed more fully below, DPI increased $55.6 billion, or 0.5 percent, in
July, increased $34.7 billion, or 0.3 percent, in June, and increased $42.1 billion, or 0.4 percent,
in May.
Wages and salaries
Private wage and salary disbursements increased $13.2 billion in July, compared with an
increase of $7.9 billion in June. Goods-producing industries' payrolls increased $4.6 billion,
compared with an increase of $1.8 billion; manufacturing payrolls increased $0.7 billion, compared
with an increase of $1.7 billion. Services-producing industries' payrolls increased $8.6 billion,
compared with an increase of $6.0 billion. Government wage and salary disbursements increased
$4.3 billion, compared with an increase of $6.1 billion.
Other personal income
Supplements to wages and salaries increased $3.8 billion in July, compared with an increase of
$3.3 billion in June.
Proprietors' income increased $4.4 billion in July, compared with an increase of $7.6 billion in
June. Farm proprietors' income decreased $2.3 billion, compared with a decrease of $2.0 billion.
Nonfarm proprietors' income increased $6.8 billion, compared with an increase of $9.6 billion.
Rental income of persons increased $4.4 billion in July, compared with an increase of $7.4
billion in June. Personal income receipts on assets (personal interest income plus personal dividend
income) increased $18.4 billion, in contrast to a decrease of $4.2 billion.
Personal current transfer receipts decreased $136.6 billion in July, compared with a decrease of
$19.6 billion in June. The July and June changes reflected provisions of the Economic Stimulus Act
of 2008, which boosted the level of personal current transfer receipts by $4.2 billion (at an annual
rate) in July, by $149.4 billion in June, and by $179.6 billion in May. These personal current transfer
receipts reflected payments to individuals who either paid no income tax or whose payment exceeded
the amount of income tax paid (see box on page 6).
Contributions for government social insurance -- a subtraction in calculating personal income --
increased $1.7 billion in July, compared with an increase of $1.1 billion in June.
Personal current taxes and disposable personal income
Personal current taxes increased $24.7 billion in July, compared with an increase of $215.5
billion in June. Provisions of the Economic Stimulus Act of 2008 reduced the level of personal
current taxes by $159.9 billion (at an annual rate) in July, by $185.0 billion in June, and by $397.5
billion in May. The reductions in current personal taxes reflected rebate payments to eligible
individual taxpayers (see box below). Disposable personal income (DPI) -- personal income less
personal current taxes -- decreased 114.7 billion, or 1.1 percent, in July, compared with a decrease of
$208.0 billion, or 1.9 percent, in June.
Personal outlays and personal saving
Personal outlays -- PCE, personal interest payments, and personal current transfer payments --
increased $24.4 billion in July, compared with an increase of $63.2 billion in June. PCE increased
$24.1 billion, compared with an increase of $65.5 billion.
Personal saving -- DPI less personal outlays -- was $133.8 billion in July, compared with $272.9
billion in June. Personal saving as a percentage of disposable personal income was 1.2 percent in
July, compared with 2.5 percent in June. Saving from current income may be near zero or negative
when outlays are financed by borrowing (including borrowing financed through credit cards or home
equity loans), by selling investments or other assets, or by using savings from previous periods. For
more information, see the FAQs on "Personal Saving" on BEA's Web site. For a comparison of
personal saving in BEA's national income and product accounts with personal saving in the Federal
Reserve Board's flow of funds accounts, go to /bea/dn/nipaweb/Nipa-Frb.asp.
Real DPI and real PCE
Real DPI -- DPI adjusted to remove price changes -- decreased 1.7 percent in July, compared
with a decrease of 2.6 percent in June.
Real PCE -- PCE adjusted to remove price changes -- decreased 0.4 percent in July, compared
with a decrease of 0.1 percent in June. Purchases of durable goods decreased 1.6 percent, compared
with a decrease of 1.4 percent. Purchases of motor vehicles and parts accounted for most of the
decrease in July and about one-half the decrease in June. Purchases of nondurable goods decreased
0.9 percent in July, compared with a decrease of 0.3 percent in June. Purchases of services increased
less than 0.1 percent, compared with an increase of 0.2 percent.
PCE price index -- The price index for PCE increased 0.6 percent in July, compared with an
increase of 0.7 percent in June. The PCE price index, excluding food and energy, increased 0.3
percent in July, the same increase as in June.
Revisions
Estimates for personal income and DPI have been revised for January through June; estimates
for PCE have been revised for April through June. Changes in personal income, current-dollar and
chained (2000) dollar DPI, and current-dollar and chained (2000) dollar PCE for May and June --
revised and as published in last month's release -- are shown below.
For January through June, the revisions to wages and salaries reflect the incorporation of the
newly available BLS tabulations of first-quarter private wages and salaries from the quarterly census
of employment and wages. Revisions to personal current taxes and to contributions for government
social insurance reflect the revisions to wages and salaries.
Change from preceding month
May June
Previous Revised Previous Revised Previous Revised Previous Revised
(Billions of dollars) (Percent) (Billions of dollars) (Percent)
Personal Income:
Current dollars...................... 219.3 218.0 1.8 1.8 6.8 7.4 0.1 0.1
Disposable personal income:
Current dollars...................... 595.4 595.9 5.7 5.7 -210.3 -208.0 -1.9 -1.9
Chained (2000) dollars............... 451.4 452.7 5.2 5.2 -240.7 -237.7 -2.6 -2.6
Personal consumption expenditures:
Current dollars...................... 76.5 76.8 0.8 0.8 57.1 65.5 0.6 0.6
Chained (2000) dollars............... 25.6 26.5 0.3 0.3 -16.2 -8.3 -0.2 -0.1
This news release presents revised estimates of wages and salaries, personal taxes, and
contributions for government social insurance for January through March 2008 (first quarter). These
estimates reflect newly available first-quarter wage and salary tabulations from the quarterly census of
employment and wages from the Bureau of Labor Statistics.
Economic Stimulus Act of 2008
The Economic Stimulus Act of 2008 provides rebate payments to eligible individual taxpayers as
well as tax reductions for businesses. For individuals, the amount of the rebate is determined by
information reported on tax filings for 2007 and is based on filing status, level of adjusted gross income,
and the number of qualifying children. According to the Joint Committee on Taxation and the
Congressional Budget Office, rebates to individuals are expected to total $106.7 billion for fiscal year
2008. The majority of rebates were sent during the initial round of payments, which began April 28,
2008, and continued on a weekly basis through mid-July 2008.
In the NIPAs, rebates for residents of the 50 states and the District of Columbia are recorded as
either an offset to personal current taxes or as a social benefit payment to persons. Rebates for
individuals with tax liabilities that exceed the rebate amount are treated as an offset to personal current
taxes in the NIPAs. Rebates for individuals who pay no income taxes (or for whom the rebate would
exceed the amount of the income taxes they do pay) are treated as a government social benefit payment to
persons in the NIPAs.
BEA's national, international, regional, and industry estimates; the Survey of Current
Business; and BEA news releases are available without charge on BEA's Web site at www.bea.gov.
By visiting the site, you can also subscribe to receive free e-mail summaries of BEA releases and
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Next release -- September 29, 2008, at 8:30 A.M. EDT for Personal Income and Outlays for August.