U.S. consumer spending increased in January 2024 when measured in dollars, but declined when adjusted for inflation. The Bureau of Economic Analysis reported those two results on February 29: personal consumption expenditures rose 0.2 percent from December in current dollars, while real expenditures fell 0.1 percent. Both were seasonally adjusted monthly changes, not annualized growth rates. [12]

Current-dollar spending values purchases at the prices prevailing when transactions occur. Real spending removes the effect of price changes. BEA’s PCE price index rose 0.3 percent over the month. The distinction is useful when reading a sales headline: more dollars spent does not, by itself, establish an increase in inflation-adjusted consumption. [12]

The Bureau of Labor Statistics had reported a 0.3 percent seasonally adjusted monthly rise in January’s Consumer Price Index for All Urban Consumers on February 13. That matching number did not make CPI the price measure used in BEA’s real-spending estimate. BEA reported its own PCE price index alongside its consumption figures; the two releases should retain their separate labels. [12][28]

Nor was the small monthly decline a finding about every household or business. These are aggregate measures, and one month does not establish a durable direction. This retrospective preserves the February release record, including BEA’s subsequently superseded estimates. A useful follow-up would compare later real-spending observations and revisions, rather than treat a nominal spending increase as proof of stronger purchasing volume. [12][28]

Source documents

  1. Personal Income and Outlays, January 2024 | U.S. Bureau of Economic Analysis (BEA)https://www.bea.gov/news/2024/personal-income-and-outlays-january-2024
  2. Consumer Price Index News Release - 2024 M01 Resultshttps://www.bls.gov/news.release/archives/cpi_02132024.htm