Disposable personal income is a direct measure of how much out-of-pocket money people have available for personal consumption (of goods and services), interest payment, and savings. In recent years, Americans have spent a higher proportion of their disposable income on personal consumption. Between 1991 and 2001, the share of personal consumption in disposable income increased from 89% to 95%, while the share of personal savings decreased from 8.3% to 2.3%. Expenditures on transportation goods and services contributed to the increased share of consumption in total disposable income. Measured in current dollars, transportation expenditures grew 86% between 1991 and 2001, while total personal consumption expenditures grew 76%.
|Per Capita Disposable Personal Income||Q2 02||Q3 02|
|Current dollars (annual rate)||27,124||27,364|
|Percent change from previous quarter||1.36||0.88|
|Chained 1996 dollars (annual rate)||24,461||24,564|
|Percent change from previous quarter||0.68||0.42|
NOTES: Disposable personal income is personal income less personal tax and nontax payments.
Chained 1996 dollars are calculated using chain-type indices, rather than constant dollars, to measure real changes in personal income. The chain-type method first calculates the real changes between adjacent years. Annual rates of real changes between adjacent years are then chained (multiplied) together to obtain the rate of real changes between nonadjacent years. Chained dollars are preferable to constant dollars because it avoids the bias of base year associated with constant dollars.
SOURCE: U.S. Department of Commerce, Bureau of Economic Analysis; National Income and Product Accounts data, Table 2.1; Oct. 31, 2002; available at: http://www.bea.doc.gov/bea/dn/nipaweb/AllTables.asp?Selected=N#S2; based on Survey of Current Business.