US Personal And Disposable Income Slid In November As PPP Loans Wound Down

consumer finance

Personal income and disposable personal income both fell about 1 percent in November, the U.S. Bureau of Economic Analysis reported on Wednesday (Dec. 23).

In its monthly report, the bureau said personal income fell 1.1 percent to $221.8 billion in November, while disposable personal income slid 1.2 percent to $218 billion and personal consumption expenditures slipped 0.4 percent to $63.3 billion.

The Personal Consumption Expenditures (PCE) Index was flat with that of October.

The bureau said the declines were due in a part to a winding down of federal pandemic-related assistance programs, which included a decrease in loans under the Paycheck Protection Program and payments through the Lost Wages Supplemental Payments program. The declines were somewhat offset by an increase in wages and salaries in the service industries.

Real PCE fell $58.5 billion in November, which included declines of $53.7 billion in spending on goods and $12.1 billion on services. Spending on clothing, footwear, food services, utilities, and accommodations saw the sharpest declines. One bright spot was increased spending on food and beverages for off-premises consumption.

On Tuesday, a Consumer Confidence Survey from The Conference Board showed consumer confidence fell in December, declining to 88.6 of a possible 100 points from 92.9 in November. The figure is intended to reflect the attitudes and purchasing plans of consumers across various economic and demographic categories.

On a more granular level, two of the data points that figure into the overall index number moved in opposite directions.

Assessing the current state of business conditions and the labor market, consumers reported what The Conference Board described as a sharp decline in sentiment in December compared to November. The figure fell to 90.3 from 105.9.

The percentage of consumers who said business conditions are “good” fell to 18.8 percent from 16 percent, month to month. The percent who said business conditions are “bad” increased to 39.5 percent from 34.9 percent.

In November, a survey by the New York Federal Reserve showed Americans see both good and bad economic times ahead, with consumers predicting the highest jump in household spending in more than four years, even as the largest share since 2013 think they’ll be worse off this time next year.

“Despite flat income and earnings growth expectations, households’ year-ahead spending growth expectations rose sharply in November to 3.7 percent — the highest level recorded in more than four years,” the New York Fed’s Center for Microeconomic Data said in releasing its November Survey of Consumer Expectations. “Labor expectations were mixed, with deteriorating expectations about the unemployment rate [but] improving expectations about job security.”

The New York Fed surveys a rotating panel of some 1,300 heads of household each month to gauge consumer expectations for economic conditions over the coming 12 months.