Personal Income Increases as Household Expenses Continue to Rise January 2026

(Illustrative Only)

Cynthia needs to go
to the doctors and has
been saving up a few months.
She doesn't understand
why medical costs are going
up. She was a teacher
for 30 years and
has to scrape together
her money to pay the bills. 

Something doesn't seem right.

A bit more positive economic news emerged in January 2026. Personal income increased, and disposable personal income rose by about $220 billion. Personal expenditures also increased, but by a smaller amount—about $81 billion—suggesting that, overall, people may have a little more money available after covering their expenses.

To fully understand the impact, however, it is important to look at how that income is distributed. The key question is whether these gains are broadly shared across the population or concentrated among a smaller group of higher earners.

Compensation increased during this period, and dividend income also rose. This may suggest that some of the gains are flowing to individuals who already earn relatively strong wages or who hold financial assets that generate investment income.

Spending patterns also shifted. Expenditures increased in areas such as healthcare, housing, utilities, and insurance. Healthcare spending is particularly notable. As the population ages, demand for healthcare services will likely continue to grow.

At the same time, healthcare costs have been rising quickly. While this growth reflects increased demand and industry expansion, it also means that many households ultimately face higher costs for care and insurance.

Personal income and outlays, January 2026.

• U.S. personal income increased by $113.8 billion (0.4%) in January 2026 compared with the previous month.

  

• Disposable personal income (income after taxes) increased by $219.9 billion (0.9%).

• Personal consumption expenditures (consumer spending) increased by $81.1 billion (0.4%).

• Personal outlays (total spending including consumption, interest payments, and transfer payments) increased by $85.8 billion.

• Personal saving totaled about $1.05 trillion in January.

• The personal saving rate was 4.5% of disposable personal income.

• Growth in personal income was primarily driven by increases in employee compensation, dividend income, and government transfer receipts.

• Consumer spending increased mainly due to higher spending on services, which was partly offset by a decline in spending on goods.

• Real personal consumption expenditures increased slightly by 0.1% for the month.

• The PCE price index (a key inflation measure) increased 0.3% in January and was 2.8% higher than one year earlier.

• Core PCE inflation (excluding food and energy) increased 0.4% for the month and 3.1% year over year.

U.S. Bureau of Economic Analysis. (2026, March 13). Personal income and outlays, January 2026. https://www.bea.gov/news/2026/personal-income-and-outlays-january-2026