News Release
Personal Income and Outlays, June 2008
June 2008
Personal income increased $6.8 billion, or 0.1 percent, and disposable personal income (DPI)
decreased $210.3 billion, or 1.9 percent, in June, according to the Bureau of Economic Analysis.
Personal consumption expenditures (PCE) increased $57.1 billion, or 0.6 percent. In May, personal
income increased $219.3 billion, or 1.8 percent, DPI increased $595.4 billion, or 5.7 percent, and PCE
increased $76.5 billion, or 0.8 percent, based on revised estimates. The pattern of changes in income
reflect the pattern of payments associated with the Economic Stimulus Act of 2008.
Real disposable income decreased 2.6 percent in June, in contrast to an increase of 5.2 percent in
May. Real PCE decreased 0.2 percent, in contrast to an increase of 0.3 percent.
2008
Feb. Mar. Apr. May June
(Percent change from preceding month)
Personal income, current dollars 0.2 0.4 0.2 1.8 0.1
Disposable personal income:
Current dollars 0.2 0.4 0.3 5.7 -1.9
Chained (2000) dollars 0.1 0.0 0.1 5.2 -2.6
Personal consumption expenditures:
Current dollars 0.0 0.6 0.3 0.8 0.6
Chained (2000) dollars -0.2 0.3 0.1 0.3 -0.2
In April, May, and June, 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), $48.1
billion in May ($577.1 billion at an annual rate), and $27.9 billion in June ($334.4 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 $242.7 billion in
June. Excluding these rebate payments, which are discussed more fully below,
DPI increased $32.4 billion, or 0.3 percent, in June, after increasing $41.7
billion, or 0.4 percent, in May.
Wages and salaries
Private wage and salary disbursements increased $11.1 billion in June, compared with an increase
of $17.7 billion in May. Goods-producing industries' payrolls increased $1.2 billion, compared with an
increase of $1.7 billion; manufacturing payrolls increased $0.8 billion, compared with an increase of
$1.3 billion. Services-producing industries' payrolls increased $9.9 billion, compared with an increase
of $16.2 billion. Government wage and salary disbursements increased $5.2 billion, compared with an
increase of $4.6 billion.
Other personal income
Supplements to wages and salaries increased $3.1 billion in June, compared with an increase of
$3.6 billion in May.
Proprietors' income increased $6.9 billion in June, compared with an increase of $4.9 billion in May.
Farm proprietors' income increased $0.5 billion, compared with an increase of $0.4 billion. Nonfarm
proprietors' income increased $6.4 billion, compared with an increase of $4.5 billion.
Rental income of persons increased $7.7 billion in June, compared with an increase of $7.2 billion
in May. Personal income receipts on assets (personal interest income plus personal dividend income)
decreased $4.2 billion, compared with a decrease of $4.1 billion.
Personal current transfer receipts decreased $21.4 billion in June, in contrast to an increase of
$187.5 billion in May. The June and May changes reflected provisions of the Economic Stimulus Act of
2008, which boosted the level of personal current transfer receipts by $149.4 billion (at an annual rate)
in June, $179.6 billion in May, and $7.8 billion in April. 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 below).
Contributions for government social insurance -- a subtraction in calculating personal income --
increased $1.6 billion in June, compared with an increase of $2.2 billion in May.
Personal current taxes and disposable personal income
Personal current taxes increased $217.1 billion in June, in contrast to a decrease of $376.2 billion
in May. Provisions of the Economic Stimulus Act of 2008 reduced the level of personal current taxes by
$185.0 billion (at an annual rate) in June, $397.5 billion in May, and $15.5 billion in April. 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
$210.3 billion, or 1.9 percent, in June, in contrast to an increase of $595.4 billion, or 5.7 percent, in
May.
Personal outlays and personal saving
Personal outlays -- PCE, personal interest payments, and personal current transfer payments
increased $60.8 billion in June, compared with an increase of $80.2 billion in May. PCE increased
$57.1 billion, compared with an increase of $76.5 billion.
Personal saving -- DPI less personal outlays -- was $275.9 billion in June, compared with $547.0
billion in May. Personal saving as a percentage of disposable personal income was 2.5 percent in June,
compared with 4.9 percent in May. 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 2.6 percent in June, in contrast to
an increase of 5.2 percent in May.
Real PCE -- PCE adjusted to remove price changes -- decreased 0.2 percent in June, in contrast
to an increase of 0.3 percent in May. Purchases of durable goods decreased 1.6 percent, in contrast to an
increase of 0.5 percent. Purchases of nondurable goods decreased 0.4 percent, in contrast to an increase
of 0.4 percent. Purchases of services increased 0.2 percent, compared with an increase of 0.3 percent.
PCE price index -- The PCE price index increased 0.8 percent in June, compared with an
increase of 0.5 percent in May. The PCE price index, excluding food and energy, increased 0.3 percent,
compared with an increase of 0.2 percent.
Revision of the Personal Income and Outlays Estimates
Personal income, personal outlays, DPI, and personal saving are revised, beginning with January
2005 to reflect the results of the annual revision in the national income and product accounts (NIPAs)
released last week. Annual revisions, which are usually released in July, incorporate source data that are
more complete, more detailed, and otherwise more reliable than those previously available.
The revisions to personal income and outlays, for 2005-2007, are shown in table 12. Revised
and previously published monthly estimates of personal income, DPI, PCE, personal saving as a
percentage of DPI, real DPI, real PCE are shown in table 13; revised and previously published annual
and quarterly estimates are shown in table 14.
Personal income was revised down $31.3 billion, or 0.3 percent, for 2005; was revised up $10.5
billion, or 0.1 percent, for 2006; and was revised down $2.4 billion, or less than 0.1 percent, for 2007.
For 2005, the downward revision was primarily accounted for by downward revisions to personal
dividend income and to nonfarm proprietors' income. For 2006, upward revisions to personal interest
income and to nonfarm proprietors' income were partly offset by a downward revision to supplements to
wages and salaries. For 2007, large downward revisions to supplements to wages and salaries, to rental
income of persons, and to government social benefits to persons were mostly offset by an upward
revision to personal interest income.
Personal current taxes was revised down $1.3 billion for 2005, was revised down $1.1 billion for
2006, and was revised up $9.1 billion for 2007. DPI was revised down $30.0 billion, or 0.3 percent, for
2005; was revised up $11.6 billion, or 0.1 percent, for 2006; and was revised down $11.4 billion, or 0.1
percent, for 2007. The percent change from the preceding year in real DPI was revised down from 1.7
percent to 1.4 percent for 2005, was revised up from 3.1 percent to 3.5 percent for 2006, and was revised
down from 3.1 percent to 2.8 percent for 2007.
Personal outlays was revised down for all 3 years: $17.9 billion for 2005, $20.3 billion for 2006,
and $21.0 billion for 2007. For 2005 and 2006, downward revisions to PCE mostly accounted for most
of the revisions; for 2007, a downward revision to PCE more than accounted for the downward revision.
The personal saving rate was revised down from 0.5 percent to 0.4 percent for 2005, was revised up
from 0.4 percent to 0.7 percent for 2006, and was revised up from 0.5 percent to 0.6 percent for 2007.
NOTE: BEA acknowledges the special efforts by the Bureau of Labor Statistics (BLS) to provide very
preliminary data for the first quarter of 2008 from the quarterly census of employment and wages. BLS
provided wage and salary data from 10 states for the securities, commodity contracts and investment
industry. These data greatly improved the estimates of wages and salaries for the finance sector.
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 2008. The
majority of rebates were sent during the initial round of payments, which began April 28, 2008, and will
continue 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.
Annual Revision of the National Income and Product Accounts
The estimates released today reflect the regular annual revision to the national income and
product accounts (NIPAs), beginning with January 2005. Annual revisions, which are usually released
in July, incorporate source data that are more complete, more detailed, and otherwise more reliable than
those previously available. This release includes revised estimates of monthly personal income,
disposable personal income, and outlays and provides an overview of the effects of the revision.
The August 2008 Survey of Current Business will contain NIPA tables and an article describing
the revisions. The revised estimates will be available on BEA's Web site at www.bea.gov.
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 announcements.
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Next release -- August 29, 2008, at 8:30 A.M. EDT for Personal Income and Outlays for July.