Personal income in the United States experienced a notable shift in February 2025. According to data from the U.S. Bureau of Economic Analysis, there was an increase of $194.7 billion, or 0.8 percent at a monthly rate. Disposable personal income, which subtracts personal current taxes from total income, rose by $191.6 billion, equating to a 0.9 percent hike. Meanwhile, personal consumption expenditures (PCE) increased by $87.8 billion, translating into a 0.4 percent growth rate.
Details from the report show that personal outlays, encompassing PCE alongside personal interest payments and transfer payments, climbed by $118.4 billion for the month. The personal saving rate stood at 4.6 percent, with total personal savings amounting to $1.02 trillion.
The primary contributors to the rise in current-dollar personal income were identified as increases in transfer receipts and compensation. PCE growth of $87.8 billion included $56.3 billion attributed to goods and $31.5 billion to services.
There was a detailed breakdown of personal income and related measures from January to February, showing a 0.8 percent increase in current-dollar personal income, a 0.9 percent increase in current-dollar disposable personal income, and a 0.5 percent rise in real disposable personal income. Furthermore, current-dollar PCE saw a rise of 0.4 percent, with a slight increase of 0.1 percent in real PCE, while the PCE price index increased by 0.3 percent and by 0.4 percent when excluding food and energy.
The increase in personal current transfer receipts featured prominently in the February figures. These were driven mainly by government social benefits and other current transfer receipts. Specifically, the rise in government social benefits was primarily due to premium tax credits for health insurance acquired through the Health Insurance Marketplace. In the realm of other transfer receipts, business payments to individuals, which included settlements from both a domestic medical device manufacturer and a social media company, were notable mentions.
Compensation increases were largely a result of rises in private wages and salaries, as per data obtained from the Bureau of Labor Statistics' Current Employment Statistics. Wages and salaries in service-producing industries rose by $35.7 billion, while those in goods-producing industries saw a $12.7 billion increase.
Additionally, the report highlighted a situation involving federal government employees who were given the option of a deferred resignation program. These employees are classified as employed in the BLS statistics because they will continue to receive compensation until they officially separate from federal service. The Bureau of Economic Analysis has not adjusted its figures to reflect this program.
The next release of the Personal Income and Outlays report is scheduled for April 30, 2025.