Our Drunken Sailors Got Revised and Updated, but They’re Still Partying

October 01, 2023

by Wolf Richter Wolf Street

Income from all sources minus government transfer payments outruns inflation again.

So here we go again. Every five years, the Bureau of Economic Analysis adjusts its Personal Consumption Expenditure data going back years as part of its “comprehensive update of the National Economic Accounts.” We’ve already seen the effects of these adjustments on the PCE inflation indexes, which were revised substantially higher for the past two years (I show the old data in green, overlaid with the new data in red here).

In terms of the inflation adjustment of consumer income and spending, the BEA, when it released the August figures today, also shifted the inflation adjustment from “2012 dollars” to “2017 dollars,” which obviously changed all the dollar figures for “real” income and “real” spending in a massive way.