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


PERSONAL INCOME AND OUTLAYS: JANUARY 2006

Personal income increased $75.2 billion, or 0.7 percent, and disposable personal income (DPI) increased $50.2 billion, or 0.5 percent, in January, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $76.7 billion, or 0.9 percent. In December, personal income increased $54.8 billion, or 0.5 percent, DPI increased $47.6 billion, or 0.5 percent, and PCE increased $64.2 billion, or 0.7 percent, based on revised estimates. This news release presents revised estimates of wages and salaries, personal taxes, and contributions for government social insurance for July through September 2005 (third quarter). These estimates reflectnewly available third-quarter wage and salary tabulations from the quarterly census of employment and wages from the Bureau of Labor Statistics.





The January change in personal income was boosted by several special factors. New Medicare Prescription Drug Plan (Medicare Plan D) payments and cost-of-living adjustments to several federal transfer payment programs boosted current personal transfer receipts; pay raises for federal civilian and military personnel boosted government wage and salary disbursements. The January change was reduced by annual adjustments to personal contributions for government social insurance and by lump-sum social security benefit payments that had boosted Decemberpersonal income. Excluding these special factors, personal income increased $37.6 billion, or 0.4 percent, in January, after increasing $48.3 billion, or 0.5 percent, in December. These special factors are discussed more fully below.

Compensation of employees

Private wage and salary disbursements increased $34.2 billion in January, compared with an increase of $24.2 billion in December. Goods-producing industries'' payrolls increased $5.2 billion, compared with an increase of $3.7 billion; manufacturing payrolls increased $1.3 billion, compared with an increase of $0.9 billion. Services-producing industries'' payrolls increased $29.0 billion, compared with an increase of $20.5 billion.

Government wage and salary disbursements increased $6.6 billion in January, compared with an increase of $1.5 billion in December. Pay raises for civilian and military personnel added $5.4 billion to government payrolls in January.

Employer contributions for employee pension and insurance funds increased $9.6 billion in January, compared with an increase of $3.4 billion in December.

Employer contributions for government social insurance increased $7.0 billion in January, compared with an increase of $1.4 billion in December. 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 $90,000 to $94,200); together, these changes added $4.2 billion in January. (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 increased $2.7 billion in January, compared with an increase of $5.1 billion in December. Farm proprietors'' income decreased $3.2 billion, in contrast to an increase of $2.0 billion. Nonfarm proprietors'' income increased $5.9 billion, compared with an increase of $3.1 billion.

Rental income of persons decreased $2.7 billion in January, compared with a decrease of $3.0 billion in December. Personal income receipts on assets (personal interest income plus personal dividend income) increased $7.6 billion, compared with an increase of $16.7 billion.

Personal current transfer receipts increased $27.9 billion in January, compared with an increase of $8.7 billion in December. The January change in current transfer receipts reflected payments for the new Medicare Prescription Drug Plan (Medicare Part D) and 4.1-percent cost-of-living adjustments to social security benefits and to several other federal transfer payment programs; together, these changes added $49.7 billion to the January increase. The January change in current transfer receipts was reduced by lump-sum social security benefits payments, which had added $6.5 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 $17.6 billion in January, compared with an increase of $3.0 billion in December. The January increase reflected increases in both employer and personal contributions for government social insurance. As noted above, employer contributions were boosted $4.2 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 (Medicare B) and the increase in the social security taxable wage base; together, these changes added $6.8 billion to January personal contributions.