May 31, 2021
In April, personal income fell $3.21 trillion (13.1%) in the U.S, according to estimates released by the Bureau of Economic Analysis. Disposable personal income (DPI) decreased $3.22 trillion (14.6%) and personal consumption expenditures (PCE) climbed $80.3 billion (0.5%).
The fall in personal income in April was primarily attributed to the decreases in government social benefits. There was also a decrease in “other” social benefits, reflecting a decrease in economic impact payments made to individuals from the American Rescue Plan Act of 2021. BEA also noted that, “Unemployment insurance also decreased, led by decreases in payments from the Pandemic Unemployment Compensation program.”
In April, the current dollar PCE increased by $80.3 billion which meant a $112.6 billion rise in spending for services versus a $32.3 billion decrease in spending for goods. Spending on recreation services, as well as food and lodging, were the two major drivers to the growth in services. A decline in nondurable goods was somewhat offset by a rise in durable items within goods. The decline in nondurable goods was broad, with food and drinks leading the way. The rise in durable goods was accounted for by an increase in motor vehicles and parts.
Personal outlays rose $82.8 billion in April while personal saving was $2.81 trillion, and the personal saving rate, personal saving as a percentage of disposable personal income, stood at 14.9%.
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