Here are updates of three charts I have posted monthly regarding national income and consumer spending during the COVID-19 recession, including new numbers for February and revisions to numbers for prior months. I also include a new chart on Medicaid spending, which has grown significantly over the last two years.

Personal Income in February was 0.5% greater than in January and 12.4% less than the peak reached in March 2021, which was boosted by the $1.9 trillion federal relief package that was enacted that month. Consumer spending increased by 0.2% from January to February, while the saving rate increased from 6.1% to 6.3%. (The January rate has been revised down from the 6.4% estimate reported last month.)

On the first chart, the stacked columns show estimated personal income for the U.S. as a whole, by month, from January 2019 through February 2022. The numbers are seasonally adjusted annual rates. I have broken personal income into four parts: employee compensation (wages and salaries, and supplements); unemployment insurance benefits; other government social benefits (e.g., Social Security pensions, Medicare- and Medicaid-funded healthcare services, stimulus checks); and other income (e.g., interest, dividends and profits of non-corporate business activities, including property rentals).

Personal income in February was $101.4 billion greater than in January: Government social benefits were down by $11.0 billion. (Within this grouping, Medicare was up by $8.9 billion, and Medicaid was up by $7.2 billion.) Employee compensation was up by $97.4 billion. Income from all other sources was up by $15.0 billion. Overall, personal income in February was 11.3% greater than in February 2020, the last month before the pandemic began to shut down the economy. Employee compensation was 11.8% higher in February 2022 than in February 2020, while government social benefits were 21.7% higher. Within the latter category, Medicaid benefits were 34.0% higher.

Also on the first chart, the black line shows monthly personal consumption expenditures. Again, these numbers are seasonally adjusted annual rates. Consumption expenditures in February 2022 were $34.9 billion (0.2%) greater than in January and $1,928.2 billion (13.0%) than in February 2020. (Adjusted for inflation, the increase from February 2020 to February 2022 was 4.6%.)

The second chart shows the personal saving rate, monthly from January 2019 through February 2022. (The saving rate is equal to the amount of personal saving divided by the amount of disposable personal income. Disposable personal income equals personal income less personal current taxes, which are mostly income taxes).

The saving rate jumped from 8.3% in February 2020 to an astounding 33.8% in April and then declined in steps to 13.0% in November. The saving rate moved up modestly in December, jumped to 19.9% in January 2021, fell back to 13.5% in February, jumped to 26.6% in March and dropped in steps to 9.5% in June. The February 2022 rate was 6.3%, down from 6.1% (revised) in January.

The third chart shows total government social benefits as a percent of personal income. (Total benefits are the sum of the unemployment insurance and other social benefit numbers shown on the first chart.)

In February 2020, prior to the pandemic, government social benefits provided 16.6% of personal income. Federal relief bills took the share to peaks of 31.0% in April 2020, 26.3% in January 2021 and 33.3% in March 2021. In February 2022, government social benefits provided 18.1% of personal income, down from 18.3% (revised) in January.

As the final chart shows, Medicaid spending grew from 3.17% of personal income in February 2020 to 3.82% in February 2022, accounting for 30% of the total growth in government social benefits over the period. (The plunges in April 2020, and January and March 2021 are due to the large stimulus payments that increased personal income for those months.)

As I noted earlier, Medicaid spending increased by 34.0% over the period. This increase is the result of the federal Families First Coronavirus Response Act’s “maintenance of eligibility” requirement, which prohibits states from removing individuals from Medicaid for the duration of the COVID-19 public health emergency as a condition for receiving enhanced federal Medicaid funding during the emergency.

The numbers underlying these charts are preliminary estimates that will be revised as more information becomes available to the statisticians at the federal Bureau of Economic Analysis.

The BEA monthly personal income press release is here.