Thursday, June 27, 2013

Personal Income Grew 0.5% in May

Personal income increased 0.5% in May, ahead of the 0.3% rise in consumption. Income has normalized following distortions at the end of last year and the beginning of this year due to increased taxes. Since income growth outpaced consumption, the savings rate improved, climbing to 3.2% in May, from 3.0% in April.

Personal income growth was led by interest, dividend and transfer income. Wage income improved in May, increasing 0.3% and disposable income grew 0.5%.

Real spending accelerated to 0.2%, however nominal spending grew slightly more. Durable goods led the spending growth in May, with nominal durable goods jumping 0.9% following a decline the previous month.

Consumer prices, according to the PCE indicator, rose 0.1%, the first increase since February. Inflation remains low as prices were 1% above their year-ago level.

Read the BEA report.

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