On February 20, 2026, the U.S. Bureau of Economic Analysis reported that personal income rose by 86.2 billion dollars, a 0.3 percent monthly increase for December 2025, with disposable personal income up 75.7 billion dollars (0.3 percent) and personal consumption expenditures rising 91.0 billion dollars (0.4 percent). The release, originally scheduled for January 29, 2026, was delayed because of the October–November 2025 federal government shutdown. Personal saving totaled 830.8 billion dollars in December, leaving a personal saving rate of 3.6 percent. The report shows spending shifted toward services while the PCE price index logged a 0.4 percent monthly gain and 2.9 percent year-over-year increase.
Key Takeaways
- Personal income increased by 86.2 billion dollars in December 2025, a 0.3 percent rise from November.
- Disposable personal income rose 75.7 billion dollars, also 0.3 percent, while personal saving stood at 830.8 billion dollars and a saving rate of 3.6 percent.
- Personal consumption expenditures increased 91.0 billion dollars (0.4 percent), driven by a 98.5 billion dollar rise in services spending and a 7.5 billion dollar decline in goods spending.
- Real PCE rose 11.5 billion dollars, a 0.1 percent gain on a monthly basis, indicating modest inflation-adjusted consumption growth.
- The PCE price index increased 0.4 percent in December and 2.9 percent from one year earlier; the core PCE index excluding food and energy also rose 0.4 percent monthly and 3.0 percent year-over-year.
- Personal current transfer receipts climbed by 38.4 billion dollars, including a 15.4 billion dollar increase in government social benefits, led by Medicare.
- Compensation increased 31.0 billion dollars, with private wages up 19.0 billion dollars and government wages up 5.3 billion dollars.
Background
The personal income and outlays series is a monthly BEA release that tracks income flows, spending, prices, and saving for U.S. individuals. It combines administrative records, tax and benefits data, and labor statistics to produce measures used by policymakers and markets. The December 2025 estimate was delayed from January 29 to February 20, 2026, because the October–November 2025 federal government shutdown interrupted normal data preparation and clearance routines. BEA notes that revisions to October and November incorporate updated Bureau of Labor Statistics Current Employment Statistics inputs on employment, hours, and earnings, which can change short-term growth rates and compensation figures. The release also flags an ongoing modernization of BEA news packages that will remove PDF and Excel tables from future releases and direct users to interactive online tables beginning with the February 2026 estimate.
December’s report reflects several cross-cutting factors. One notable one-time component was an insurance settlement paid by a domestic electric utility to households related to the 2023 Maui wildfire; BEA reports this as part of other current transfer receipts. Medicare was the largest driver within government social benefits. Wage and salary gains were recorded across services-producing private industries, offset slightly by a small decline in goods-producing private-sector wages. Those composition effects are important because they help explain why nominal spending on services rose while goods spending fell.
Main Event
The headline increase of 86.2 billion dollars in personal income in December mainly reflected higher personal current transfer receipts and compensation. Personal current transfer receipts rose by 38.4 billion dollars, of which 23.0 billion dollars was categorized as other current transfer receipts and 15.4 billion dollars as government social benefits to persons. BEA specifically attributes the increase in other current transfer receipts to a settlement paid by a domestic electric utility to U.S. households related to the 2023 Maui wildfire.
Compensation contributed 31.0 billion dollars to the income gain, with private wages and salaries up 19.0 billion dollars and government wages and salaries up 5.3 billion dollars. Within private wages, services-producing industries added about 20.2 billion dollars while goods-producing industries declined by roughly 1.2 billion dollars, per BEA’s use of BLS CES inputs. Those labor income patterns help account for the composition of spending growth recorded in PCE.
Personal consumption expenditures rose by 91.0 billion dollars in current dollars, driven by a 98.5 billion dollar increase in services spending that more than offset a 7.5 billion dollar drop in goods spending. In real terms, PCE increased modestly by 11.5 billion dollars, a 0.1 percent monthly gain, indicating subdued inflation-adjusted consumption growth. Personal outlays, which include PCE, personal interest payments, and personal current transfer payments, increased 90.2 billion dollars in December.
On prices, the PCE price index rose 0.4 percent for the month; core PCE, excluding food and energy, also rose 0.4 percent. From December 2024 to December 2025, headline PCE inflation was 2.9 percent and core PCE inflation was 3.0 percent, continuing the pattern of core inflation running slightly above the headline rate in this period.
Analysis & Implications
The December data show moderate nominal income growth paired with shifting spending toward services. The 0.3 percent increase in personal income and the 0.4 percent rise in PCE indicate consumers continued to spend, but the small 0.1 percent real PCE gain suggests that inflation is eroding some purchasing power. With the personal saving rate at 3.6 percent, households retained a smaller margin of income for buffers or debt reduction than in earlier post-pandemic periods; that low saving rate amplifies sensitivity to future income shocks or interest rate changes.
Core PCE inflation at 3.0 percent year-over-year remains above many central bank targets and is likely to keep monetary policymakers attentive. Monthly core inflation of 0.4 percent is notable for its persistence, and if sustained, it would imply ongoing upside risks to inflation expectations. At the same time, the composition of wage gains—stronger in services-producing industries—may support continued services price pressures, given labor intensity in many service sectors.
The one-time transfer from the utility settlement boosted reported income and transfers for December but does not necessarily reflect underlying labor-market strength. Analysts should separate recurring labor income trends from exceptional transfer payments when assessing household resilience. Revisions to October and November based on updated BLS CES inputs also underscore that short-term monthly estimates can shift as source data are refined, which matters for near-term GDP and policy readings.
BEA’s move to phase out static PDF and Excel tables for interactive online tables is aimed at improving access to detailed series; users relying on automated downloads will need to adjust workflows. The modernization could speed access to more granular historical series but may create short-term friction for institutional users who depend on archived table formats.
Comparison & Data
| Series (percent change from preceding month) | November | December |
|---|---|---|
| Current-dollar personal income | 0.4 | 0.3 |
| Current-dollar DPI | 0.3 | 0.3 |
| Real DPI | 0.1 | 0.0 |
| Current-dollar PCE | 0.4 | 0.4 |
| Real PCE | 0.2 | 0.1 |
| PCE price index | 0.2 | 0.4 |
| PCE price index, excluding food and energy | 0.2 | 0.4 |
The table above shows that price measures accelerated in December compared with November, while real measures of income and spending flattened or slowed. Real DPI moved from a small positive in November to flat in December, while the PCE price index doubled its monthly gain. That pattern of rising nominal values with slowing real growth highlights why analysts watch both the nominal and real series together to assess household purchasing power and the inflationary backdrop.
Reactions & Quotes
Below are two short excerpts drawn from the official data release and underlying data sources, followed by context explaining their significance.
The BEA release summarized the headline changes succinctly before providing tables and technical notes.
Personal income increased 86.2 billion dollars in December 2025, reflecting increases in personal current transfer receipts and compensation.
U.S. Bureau of Economic Analysis (official release)
This line captures the two main drivers of December’s income rise: transfers and compensation. The transfers include a reported settlement payment, which is a nonrecurring element, while compensation growth is backed by BLS CES updates; separating these components matters for evaluating sustainable income trends.
Compensation increased 31.0 billion dollars, based on Bureau of Labor Statistics Current Employment Statistics data.
Bureau of Labor Statistics (CES data via BEA)
BEA relies on BLS CES inputs for employment and earnings benchmarks used in compensation estimates. The linkage means that subsequent BLS data revisions can propagate to BEA income and wage measures, which is why BEA revised October and November when updated CES inputs became available.
Unconfirmed
- The specific identity and detailed terms of the domestic electric utility settlement cited by BEA are not disclosed in the release; public reporting links this payment to the 2023 Maui wildfire but BEA does not name the utility in this release.
- Longer-term behavioral effects of the settlement payment on household spending and saving are not established; the payment is a one-time transfer and may not indicate a durable rise in household income.
Bottom Line
December 2025 data show modest nominal income growth and continued consumer spending, with a clear tilt toward services. Inflation measures rose in December on both headline and core bases, while real spending gains were limited; together these signals point to persistent, if moderate, price pressures that reduce real household purchasing power.
The unusually low personal saving rate of 3.6 percent and the role of a one-time transfer in boosting income mean analysts should interpret the December uptick cautiously. For policymakers and markets, the combination of continued core inflation near 3.0 percent and steady services demand suggests vigilance on monetary policy, while data revisions and BEA’s modernization of its dissemination practices are likely to change how quickly and precisely analysts can track these trends.