Personal Income Increased 0.4% in August; Spending Increased 0.6%

by Calculated Risk on 9/26/2025 08:30:00 AM

From the BEA: Personal Income and Outlays, August 2025

Personal income increased $95.7 billion (0.4 percent at a monthly rate) in August, according to estimates released today by the U.S. Bureau of Economic Analysis. Disposable personal income (DPI)—personal income less personal current taxes—increased $86.1 billion (0.4 percent) and personal consumption expenditures (PCE) increased $129.2 billion (0.6 percent).

Personal outlays—the sum of PCE, personal interest payments, and personal current transfer payments—increased $132.9 billion in August. Personal saving was $1.06 trillion in August and the personal saving rate—personal saving as a percentage of disposable personal income—was 4.6 percent.
…
From the preceding month, the PCE price index for August increased 0.3 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

From the same month one year ago, the PCE price index for August increased 2.7 percent. Excluding food and energy, the PCE price index increased 2.9 percent from one year ago.
emphasis added

The August PCE price index increased 2.7 percent year-over-year (YoY), up from 2.6 percent YoY in July.

Inflation was at expectations.

Using the two-month method to estimate Q3 real PCE growth, real PCE was increasing at a 4.0% annual rate in Q3 2025. (Using the mid-month method, real PCE was increasing at 3.0%).  This suggests decent PCE growth in Q3.