February 2011 Personal Income and Outlays, Retail Sales and Consumer Debt

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Bureau of Economic Analysis data showed that personal income increased $38.1 billion (0.3 percent), and disposable personal income (DPI) increased $36.0 billion (also 0.3 percent) in February. Personal consumption expenditures (PCE) increased $69.1 billion (0.7 percent). Real (inflation adjusted) disposable income decreased 0.1 percent in February while real PCE increased 0.3 percent. On average, then, Americans spent all of their marginal increase in income.
 

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Retail sales rose by 1.0 percent during February, the eighth straight month of increases. Motor vehicles sales exhibited the largest percentage gain (2.3 percent), while food service sales turned higher after two months of declines.
 

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Total consumer debt outstanding increased for a fifth month in February, at seasonally adjusted and annualized rate of 3.8 percent. Once again, all of the credit expansion occurred in the “non-revolving” category, however, since revolving credit (i.e., credit cards) shrank at an annualized rate of 4.1 percent, while non-revolving credit increased at an annual rate of 7.7 percent. As we have seen before, the federal government was the debt holder with the largest increase in non-revolving debt (+$8.2 billion, not seasonally adjusted). That implies more individuals took out student loans in February.