Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Obamacare Increases Personal Income...And Spending

By Justin Loiseau - Mar 3, 2014 at 12:34PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Both income and expenditure increases exceed expectations for January.

Americans are making more and spending more, according to a January Personal Income and Outlays report (link opens as PDF) released today by the Commerce Department. 

After flatlining for December, personal income increased 0.3% for January, beating analyst estimates by 0.1 percentage points. For the same period, personal spending accelerated even faster than income, up 0.4%. Analysts had predicted much milder 0.1% growth.

The Commerce Department took special note of the role of the Obamacare rollout, which led to increased spending on health care and increased government social benefit payments:

Measures of health care services were boosted $29.0 billion to reflect the effect of the ACA [Affordable Care Act] on demand for these services. ... Medicaid benefits were boosted $19.2 billion due to expanded coverage under the ACA.

In a potential sign of longer-term economic pessimism, durable goods spending dipped another 0.4% after falling 2.6% in December.  According to The Wall Street Journal, January's decline was due mostly to a slump in auto sales. Services proved to be the bright spot starting 2014, with spending up 0.9%. The jump in spending on services was the result of of higher heating bills.

Comparing January 2014 to January 2013, personal income advanced 4.1%, while spending increased a slightly slower 3.5%.

-- Material from The Associated Press was used in this report. 

link

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
656%
 
S&P 500 Returns
144%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/01/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.