The Bureau of Economic Analysis of the Department of Commerce. Personal income measures income from all sources. The largest component of total income is wages and salaries, a figure which can be estimated using payrolls and earnings data from the employment report. Beyond that, there are many other categories of income, including rental income, government subsidy payments, interest income, and dividend income. Personal income is a decent indicator of future consumer demand, but it is not perfect.
Recessions usually occur when consumers stop spending, which then drives down income growth.
Looking solely at income growth, one may therefore miss the turning point when consumers stop spending. The retail sales report will provide a good read on durable and nondurable consumption, while service purchases tend to grow at a fairly steady pace, making this a relatively predictable report, and ranking it well below retail sales in terms of market importance. All Rights Reserved. Inc. Data is provided for informational purposes only, and is not intended for trading purposes.