The Bureau of Economic Analysis reports that in May, US personal income fell by 0.4% ($109.6 billion), while disposable income declined 0.6% ($125.0 billion), and consumer spending dropped 0.1% ($29.3 billion). The decline was mainly due to reduced government benefits and lower farm income. Personal savings totaled $1.01 trillion, with a savings rate of 4.5%. Inflation remained modest, with the PCE price index up 0.1% from April and 2.3% year-over-year. They write:
Personal income decreased $109.6 billion (0.4 percent at a monthly rate) in May, according to estimates released today by the U.S. Bureau of Economic Analysis. Disposable personal income (DPI)—personal income less personal current taxes—decreased $125.0 billion (0.6 percent) and personal consumption expenditures (PCE) decreased $29.3 billion (0.1 percent).
Personal outlays—the sum of PCE, personal interest payments, and personal current transfer payments—decreased $27.6 billion in May. Personal saving was $1.01 trillion in May and the personal saving rate—personal saving as a percentage of disposable personal income—was 4.5 percent.
The decrease in current-dollar personal income in May primarily reflected decreases in government social benefits to persons and in farm proprietors’ income that were partly offset by an increase in compensation.
The $29.3 billion decrease in current-dollar PCE in May reflected a decrease of $49.2 billion in spending on goods that was partly offset by an increase of $19.9 billion in spending for services.
From the preceding month, the PCE price index for May increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.2 percent.
From the same month one year ago, the PCE price index for May increased 2.3 percent. Excluding food and energy, the PCE price index increased 2.7 percent from one year ago.
