January 31, 2005
Like The Personal Income Numbers? Thank Microsoft.
From today's report on December personal income growth (courtesy of the Commerce Department's Bureau of Economic Analysis):
Personal income increased $360.9 billion, or 3.7 percent, and disposable personal income (DPI) increased $354.4 billion, or 4.0 percent, in December, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $66.4 billion, or 0.8 percent. In November, personal income increased $41.4 billion, or 0.4 percent, DPI increased $36.9 billion, or 0.4 percent, and PCE increased $31.5 billion, or 0.4 percent, based on revised estimates.
The 3.7 percent increase in December personal income mainly reflected the payment of a special dividend by the Microsoft Corporation. Excluding this special factor, which is discussed more fully below, personal income increased $62.7 billion, or 0.6 percent, in December, after increasing $41.4 billion, or 0.4 percent, in November.
Forbes.com puts some perspective on the Microsoft contribution.
While it is rare for a single company's dividend payment to impact incomes so strongly, Microsoft is a rare firm. With one of the most widely held stocks in the U.S., the software colossus forked over $32 billion. Compare that to the $38 billion that Uncle Sam paid out in federal income tax rebates in the summer of 2001.
Recipients did not, however, rush out to spend their windfall. Again, from the Commerce Department:
Personal saving -- DPI less personal outlays -- was $308.0 billion in December, compared with $23.1 billion in November. Personal saving as a percentage of disposable personal income was 3.4 percent in December, compared with 0.3 percent in November.
That was enough to drive personal saving into positive territory for the year. But, of course, its national saving -- which includes businesses and the government -- that we really ought to focus on anyway.
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