Personal Income And Outlays

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DEFINITION of 'Personal Income And Outlays '

A set of two data points produced by the Bureau of Economic Analysis that track personal income and monthly spending. Personal income is the dollar value of income from all sources by individuals in the U.S.; personal outlays is the dollar value of purchases of durable and non-durable goods and services by consumers in the U.S.

INVESTOPEDIA EXPLAINS 'Personal Income And Outlays '

This economic indicator helps gauge the strength of the consumer sector in the United States. Because consumer spending equates to such a large portion of the country's GDP, being able to gauge trends in income and spending is very important to investors, as it indicates the overall strength of the economy. Also, if investors can track whether consumer monies are being spent on durables, non-durables or services, they can better plan in which companies to invest.

As income and spending increase, it is thought that the equity markets should react positively. This is because of an assumed resulting increase in corporate profits. This could lead to wage and product inflation, though, which would have a negative effect on the bond markets.

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