U.S. personal income rises in July as spending growth slows

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US income, spending July 2024

Highlights

U.S. personal income rose by $115.1 billion or 0.4% in July, while disposable personal income increased 0.5% and consumption expenditures rose 0.2%.
July saw personal saving reach $712.0 billion with a 3.0% saving rate, as income growth outpaced spending, particularly with an $86.2 billion rise in services consumption offset by a $49.9 billion decline in goods.
The PCE price index and core PCE both increased 0.2% month-over-month in July, with annual headline PCE inflation at 3.7% and core PCE at 3.3%.

July income, spending and inflation data

As reported by U.S. Bureau of Economic Analysis, personal income increases by $115.1 billion, or 0.4% at a monthly rate, in July. Disposable personal income, which excludes personal current taxes, increases by $125.9 billion, or 0.5%, while personal consumption expenditures rise by $36.3 billion, or 0.2%.

Personal outlays, which include consumption, personal interest payments and transfer payments, increase by $36.6 billion in July. Personal saving stands at $712.0 billion, and the personal saving rate is 3.0% of disposable personal income.

The gain in current-dollar personal income primarily reflects increases in compensation, government social benefits and personal income receipts on assets. The increase in current-dollar consumption is driven by an $86.2 billion rise in services spending, partly offset by a $49.9 billion decline in goods spending.

Real personal consumption expenditures edge up by $1.3 billion, or less than 0.1%, in July. The PCE price index increases 0.2% from the previous month, and the core measure excluding food and energy also rises 0.2%; from a year earlier, headline PCE inflation is 3.7% and core PCE inflation is 3.3%.

Implications for the U.S. economic outlook

The July figures indicate that income growth continues to outpace consumer spending, a pattern that supports a higher flow into savings even as households keep increasing services consumption. The split between stronger services demand and weaker goods demand also suggests continued normalization in consumer behavior across the U.S. economy.

BEA says the 2026 annual updates of national, industry and regional data will begin on the same day for the first time, September 30, 2026, reflecting improvements in the concurrent production of its statistics. The next personal income and outlays release is scheduled for September 30, 2026, at 8:30 a.m. EDT.

In our earlier coverage of the Federal Reserve’s rate outlook amid stubborn inflation, we noted that officials were debating whether borrowing costs may need to rise again if price pressures fail to cool convincingly. The piece highlighted expectations for July core PCE to remain elevated and pointed to heightened market focus on policymakers’ Jackson Hole messaging as investors weighed the risk of further tightening.

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