Personal Consumption Expenditures shows the level of consumer spending for all goods and services, quoted in both real (inflation adjusted) and nominal (current-dollar) terms and divided into three categories: durable goods, nondurable goods and services. This indicator represents two-thirds of the Gross Domestic Product (GDP).

Personal Income shows households' income from all sources, which are self-employment, employment, investments, and transfer payments. It can also be described as total pretax annual income earned by private trust funds, individuals and non-profit organizations.

Disposable personal income (DPI) measures personal income discounting tax and non-tax payments, or, in other words, personal saving subtracts personal consumption expenditures plus interest payments and net transfers to foreigners from personal income.

This index can be helpful in forecasting changes in consumer spending patterns. Two-thirds of GDP is personal consumption; therefore consumer spending has an effect on economic growth.

Spending is determined mostly by income, and average US consumer spends approximately 95 cents of each new dollar. Larger spending benefits the stock market and stimulates corporate profits.