The following is the unedited transcript of the news release from the Bureau of Economic Analysis.


Personal income increased $56.0 billion, or 0.5 percent, and disposable personal income (DPI) increased $48.7 billion, or 0.5 percent, in February, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $12.0 billion, or 0.1 percent. In January, personal income increased $30.4 billion, or 0.3 percent, DPI increased $43.7 billion, or 0.4 percent, and PCE increased $42.0 billion, or 0.4 percent, based on revised estimates. Real disposable income increased 0.3 percent in February, compared with an increase of 0.1percent in January. Real PCE was unchanged in February; and increased 0.1 percent in January.

Compensation of employees

Private wage and salary disbursements increased $14.8 billion in February, compared with an increase of $21.9 billion in January. The January change in private wages and salaries reflected an adjustment of $15.0 billion (at an annual rate) for large bonus payments. This type of irregular payment is not accounted for in the primary monthly source data for wages and salaries. The adjustment to January wages was based on data from state governments and from other sources. (The $15.0 billion adjustment is also reflected in the February estimate and a similar adjustment will be made to March.) Goods-producing industries'' payrolls increased $2.7 billion in February, compared with an increase of $1.1 billion in January; manufacturing payrolls increased $2.2 billion, compared with an increase of $1.7 billion. Services-producing industries'' payrolls increased $12.0 billion, compared with an increase of $20.9 billion.

Government wage and salary disbursements increased $5.8 billion in February, compared with an increase of $10.7 billion in January. Pay raises for federal civilian personnel added $0.9 billion to the change in government payrolls in February; pay raises for federal civilian and military personnel had added $7.2 billion to government payrolls in January.

Employer contributions for employee pension and insurance funds increased $4.7 billion in February, compared with an increase of $5.8 billion in January. Employer contributions for government social insurance increased $1.2 billion in February, compared with an increase of $6.1 billion in January. The January increase reflected an increase in the tax rate paid by employers to state unemployment insurance funds and an increase in the social security taxable wage base (from $97,500 to $102,000); together, these changes added $4.0 billion to the January change. (Changes in employer contributions for government social insurance do not affect personal income, because employer contributions for government social insurance are also included in total contributions for government social insurance, which is a subtraction in the calculation of personal income.)

Other personal income

Proprietors'' income decreased $5.8 billion in February, in contrast to an increase of $5.6 billion in January. Farm proprietors'' income decreased $3.2 billion, compared with a decrease of $3.4 billion. Nonfarm proprietors'' income decreased $2.7 billion, in contrast to an increase of $9.0 billion in January.

Rental income of persons decreased $4.0 billion in February, compared with a decrease of $3.9 billion in January. Personal income receipts on assets (personal interest income plus personal dividend income) increased $4.0 billion, compared with an increase of $3.0 billion.

Personal current transfer receipts increased $38.2 billion in February, in contrast to a decrease of $4.7 billion in January. The changes in personal current transfer receipts primarily reflect the pattern of federal Medicare part D prescription drug payments, which were $46.4 billion in February, $17.2 billion in January, $39.1 billion in December, and $35.3 billion in November.These payments were reduced in $27.1 billion in January, $8.5 billion in December, and $8.7 billion in November to recover overpayments that were made in 2006. The January change in current transfer receipts reflected 2.3-percent cost-of-living adjustments to social security benefits and to several other federal transfer payment programs; together, these changes added $15.5 billion to the January change. The January change in current transfer receipts was also reduced by lump-sum social security benefits payments, which had added $6.9 billion to December benefit payments; these benefit payments resulted from a recalculation of the earnings base underlying the benefits for recent retirees.

Contributions for government social insurance -- a subtraction in calculating personal income -- increased $2.6 billion in February, compared with an increase of $14.1 billion in January. The January increase reflected increases in both employer and personal contributions for government social insurance. As noted above, employer contributions were boosted $4.0 billion in January by increases in unemployment-insurance rates and in the social security taxable wage base. The January increase in personal contributions for government social insurance reflected an increase in the monthly premium paid by participants in the supplementary medical insurance program and in the increase in the social security taxable wage base; these changes added $5.0 billion to January personal contributions.

Personal current taxes and disposable personal income

Personal current taxes increased $7.3 billion in February, in contrast to a decrease of $13.3 billion in January. Federal net nonwithheld income taxes (payments of estimated taxes plus final settlements less refunds) reduced the January change by $23.2 billion, based on federal budget projections of lower final settlements and higher refunds for 2008. Indexation provisions of current tax law reduced federal withheld income taxes by $4.1 billion in January.

Disposable personal income (DPI) -- personal income less personal current taxes – increased $48.7 billion, or 0.5 percent, in February, compared with an increase of $43.7 billion, or 0.4 percent, in January.

Personal outlays and personal saving

Personal outlays -- PCE, personal interest payments, and personal current transfer payments increased $15.8 billion in February, compared with an increase of $45.8 billion in January. PCE increased $12.0 billion, compared with an increase of $42.0 billion.

Personal saving -- DPI less personal outlays -- was a positive $27.1 billion in February, in contrast to a negative $5.7 billion in January. Personal saving as a percentage of disposable personal income was a positive 0.3 percent in February, in contrast to a negative 0.1 percent in January.

Negative personal saving reflects personal outlays that exceed disposable personal income. 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.