Personal Income, Spending Up in January

 

March 1, 2007 -- Year-end bonuses and stock options boosted personal income by 1 percent in January, the biggest gain in more than a year, while consumer spending rose by 0.5 percent, the Commerce Department reported Thursday.

The growth in personal income followed weaker gains in December, and included a $64.2 billion increase in private wage and salary disbursements, the report said.

Within that increase, after-tax disposable income rose 0.8 percent in January, compared to 0.5 percent in December, and was up 4.8 percent from the same period last year, the report said.  

With income growth outpacing spending, the personal savings rate rebounded to minus 1.2 percent in January from minus 1.4 percent the previous month, the report said.

Consumer spending accounts for roughly two-thirds of the economy.

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