Employer contributions for employee pension and insurance funds increased $3.2 billion in January, compared with an increase of $3 billion in December, according to the Bureau of Economic Analysis. Employer contributions for government social insurance increased $2.7 billion in January, compared to $3.7 billion in December.
The January estimate reflected increases in the social security taxable wage base (from $100,000 to $113,700), in the tax rate paid by employers to state unemployment insurance, and in employer contributions for the federal unemployment tax and for pension guaranty. These changes added $5.9 billion to January.
Contributions for government social insurance -- a subtraction in calculating personal income -- increased $126.7 billion in January, compared with an increase of $6.3 billion in December. The January estimate reflected increases in both employer and employee contributions for government social insurance. The January estimate of employee contributions for government social insurance reflected the expiration of the “payroll tax holiday,” that increased the social security contribution rate for employees and self-employed workers by 2 percentage points, or $114.1 billion at an annual rate.
Personal income decreased $505.5 billion, or 3.6 percent, in January, according to the Bureau of Economic Analysis. Disposable income also decreased $491.4 billion, or 4 percent. Personal consumption expenditures increased $18.2 billion, or 0.2 percent.
In December, personal income increased $353.4 billion, or 2.6 percent and disposable personal income increased $325.7 billion, or 2.7 percent. Personal consumption expenditures increased $14.8 billion, or 0.1 percent, based on revised estimates.
Real disposable income decreased 4 percent in January compared to an increase of 2.7 percent in December. Real personal consumption expenditures increased 0.1 percent, the same increase as in December.
The 4 percent decrease in January disposable personal income mainly reflected the effect of special factors, which boosted employee contributions for government social insurance in January and which had boosted wages and salaries and personal dividends in December.