Personal income increased $90.4 billion (0.4 percent) in November according to estimates released today by the Bureau of Economic Analysis (tables 3 and 5). Disposable personal income (DPI) increased $70.4 billion (0.4 percent) and personal consumption expenditures (PCE) increased $104.7 billion (0.6 percent). Real DPI decreased 0.2 percent in November and Real PCE increased less than 0.1 percent; spending on services increased 0.5 percent and spending on goods decreased 0.8 percent (tables 5 and 7). The PCE price index increased 0.6 percent. Excluding food and energy, the PCE price index increased 0.5 percent (table 9).On the spending side, levels jumped up with the first round of vaccinations for most Americans this Spring, and has remained elevated since then, even after accounting for inflation.
The $104.7 billion increase in current-dollar PCE in November reflected an increase of $97.4 billion in spending for services and a $7.4 billion increase in spending for goods (table 3). The increase in services was widespread, led by housing and utilities. Within goods, an increase in nondurable goods (mainly gasoline and other energy goods) was partly offset by a decrease in durable goods (led by recreational goods and vehicles as well as motor vehicles and parts).To me, this indicates that we have now adjusted to the COVID World, and now are spending and existing in similar patterns to what we did pre-COVID, with modifications in behaviors such as masking and perhaps in the method in which we consume the same items we did before. But despite the gains in the last 9 months of 2021, some parts of the services side of the economy still have yet to benefit from the overall gains in spending that have happened in the country over the last 21 months. Food and accomodation services have barely nudged ahead of the inflation-adjusted pre-COVID totals, and transportation and recreational services are still in the hole. this poverty-reducing measure. The other income item of note that grabbed my attention was on how business owners are doing. For the first time since the pandemic started, business owners were getting more money from their everyday operations than they were from PPP loans and other subsidies, which is a strong indicator that things have finally returned to a near-normal situation during this Biden Boom. corporate profits are at record levels, wages continue to rise (particularly at the low end), the stock market is at record highs, and spending continued at a solid pace in November despite all of the media-induced fears about inflation. Other than the record profiteering (which can be controlled with the better anti-trust enforcement and higher corporate taxes that are in Build Back Better, this seems like a good situation to be in, although that nagging virus is certainly the wild card as 2021 winds down.