Personal Income and Spending, also known as Personal Income and Consumption, is a report generated by the Department of Commerce’s Bureau of Economic Analysis on consumer spending habits and income levels in the US. The report is released at the first of the month and includes data for two months previous to the release (for example, June’s report features data for April.)
The Personal Income and Spending report uses employment reports to track income from payroll files. Additionally, rental income, interest payments and dividend income, as well as income from other non-payroll sources, are factored into the report. The report expresses income in two ways: in billions of dollars, and in percentage change from previous reports. The second half of the report also expresses information about consumer spending across three broad economic categories: consumable goods, non-consumables, and services.
Traders tend to use the first half of the report as an indicator of potential demand for and spending in various industries. This can be a viable tool for market analysis, although it has one major drawback in the fact that the report doesn’t reflect whether or not people intend to spend or save increased income. The second half of the report can be more useful for determining which sectors of the market show the most potential for growth due to increased spending, but traders widely consider this section of the report to be less important than the Census Bureau’s Retail Sales report for predicting industry growth.