Personal current taxes and disposable personal income

Personal current taxes increased $25.0 billion in January, compared with an increase of $7.2 billion in December. Indexation provisions of current tax law reduced federal withheld income taxes by $4.1 billion in January. Federal net nonwithheld income taxes (payments of estimated taxes plus final settlements less refunds) boosted the January increase by $5.6 billion, based on federal budget projections for 2006.

Disposable personal income (DPI) -- personal income less personal current taxes -- increased $50.2 billion, or 0.5 percent, in January, compared with an increase of $47.6 billion, or 0.5 percent, in December.




Personal outlays and personal saving

Personal outlays -- PCE, personal interest payments, and personal current transfer payments increased $77.9 billion in January, compared with an increase of $65.6 billion in December. PCE increased $76.7 billion, compared with an increase of $64.2 billion.

Personal saving -- DPI less personal outlays -- was a negative $63.3 billion in January, compared with a negative $35.7 billion in December. Personal saving as a percentage of disposable personal income was a negative 0.7 percent in January, compared with a negative 0.4 percent in December. 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. For more information, see the FAQs on """"Personal Saving"""" on BEA''s Web site.

Real DPI and real PCE

Real DPI -- DPI adjusted to remove price changes -- increased 0.1 percent in January, compared with an increase of 0.5 percent in December. In January, the smaller increase in real DPI than in current-dollar DPI reflected an increase in the PCE implicit price deflator, which is used to deflate DPI. The PCE price deflator increased 0.5 percent in January; following no change in December; most of the January increase was accounted for by increases in food and energy prices.

Real PCE -- PCE adjusted to remove price changes -- increased 0.4 percent in January, compared with an increase of 0.7 percent in December. Purchases of durable goods increased 1.3 percent, compared with an increase of 4.1 percent. Purchases of motor vehicles and parts
decelerated sharply in January. Purchases of nondurable goods increased 1.3 percent, compared with an increase of 0.4 percent. Purchases of services decreased 0.3 percent, in contrast to an increase of 0.3 percent.


2005 Personal Income and Outlays

Personal income increased 5.5 percent in 2005 (that is, from the 2004 annual level to the 2005 annual level), compared with an increase of 5.9 percent in 2004. DPI increased 4.3 percent, compared with an increase of 6.1 percent. PCE increased 6.5 percent, the same increase as in 2004.

Real DPI increased 1.5 percent in 2005, compared with an increase of 3.4 percent in 2004. Real PCE increased 3.6 percent, compared with an increase of 3.9 percent.