Here are updates of two charts I have previously posted regarding income and consumer spending during the COVID-19 recession, including new numbers for February and revisions to numbers for prior months.

As a result of the $900 billion federal relief package enacted in late December, personal income rose 10.1% from December to January. Consumer spending increased by a more modest 3.4%, while the saving rate soared to 19.8%. In February, personal income declined by 7.1% and consumer spending decreased by 1.0%. Both income and spending in February were well above December levels. The February saving rate was 19.6%, 0.1% greater than December’s rate.

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 2021. 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, Medicare and Medicaid); and other income (e.g., interest, dividends and profits of non-corporate business activities, including property rentals).

The unusually large value of other government social benefits for April 2020 reflects the government stimulus checks of up to $1,200 mailed to low- and moderate-income households. With these payments, personal income was 10.3% higher in April than in February, the last month before the COVID-19 recession began. In May, June and July income from unemployment insurance was boosted by the special $600 per week federal UI benefit, which expired at the end of July. The December relief bill provided checks of up to $600 to low- and moderate- income households, with up to $600 additional for each child. The bill also revived the special unemployment insurance benefit (now at $300 per week) for 13 weeks ending March 14. The most recent stimulus bill extended this benefit to September 6.

Personal income in February was $1,516.6 billion less than in December. Government social benefits were down by $1,584.1 billion. Employee compensation was up by $3.9 billion. All other sources were up by $63.6 billion.
Next month’s report on personal from BEA will show another spike in personal income due to the recent stimulus bill.

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 2021 were $149.0 billion (1.0%) less than in January.

The second chart shows the personal saving rate, monthly from January 2019 through February 2021. (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 33.7% in April and then declined in steps to 12.5% in November. It moved up modestly in December, jumped to 19.8% in January and then fell back to 13.6% in February. The total amount saved since March 2020 is $3.1 trillion. I will have more to say about the macroeconomic implications of this in a subsequent post.

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

The BEA press release is here. A BEA table showing the effects of selected federal pandemic response programs on personal income is here.