June 26, 2020
In May, personal income fell $874.2 billion (4.2%) in the U.S, according to estimates released by the Bureau of Economic Analysis. Disposable personal income (DPI) decreased $911.1 billion (4.9%) and personal consumption expenditures (PCE) rose $994.5 billion (8.2%).
Real DPI declined 5.0% in May and Real PCE rose 8.1%. The PCE price index increased 0.1%. The PCE price index less food and energy climbed 0.1%.
The decline in personal income in May was primarily attributed to “a decrease in government social benefits to persons as payments made to individuals from federal economic recovery programs in response to the COVID-19 pandemic continued, but at a lower level than in April,” according to BEA.
In May, the real PCE rose by $892.6 billion revealing a $590.4 billion increase in spending for goods and a $363.8 billion increase in spending for services. Within goods, increases in spending on motor vehicles and parts as well as recreational goods and vehicles were the main contributors to the increase. Within services, the leading contributors to the decrease were spending for health care as well as food services and accommodations.
Personal outlays rose $989.9 billion in May while personal saving was $4.12 trillion and the personal saving rate, personal saving as a percentage of disposable personal income, stood at 23.2%.
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