Disposable Income Decreased $911.1 Billion in the U.S. in May 2020

Personal income decreased $874.2 billion (4.2%) in May according to estimates released today by the Bureau of Economic Analysis (tables 3 and 5). Disposable personal income (DPI) decreased $911.1 billion (4.9%) and personal consumption expenditures (PCE) increased $994.5 billion (8.2%).

Real DPI decreased 5.0% in May and Real PCE increased 8.1% (tables 5 and 7). The PCE price index increased 0.1%. Excluding food and energy, the PCE price index increased 0.1%.

The decrease in personal income in May primarily reflected 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 (table 3). For more information, see “How are the economic impact payments for individuals authorized by the CARES Act of 2020 recorded in the NIPAs?

2020
Jan. Feb. Mar. Apr. May
Percent change from preceding month
Personal income:
     Current dollars 0.6 0.5 -2.2 10.8 -4.2
Disposable personal income:
     Current dollars 0.6 0.5 -2.1 13.1 -4.9
     Chained (2012) dollars 0.5 0.4 -1.8 13.6 -5.0
Personal consumption expenditures (PCE):
     Current dollars 0.4 0.0 -6.6 -12.6 8.2
     Chained (2012) dollars 0.3 -0.1 -6.4 -12.2 8.1
Price indexes:
     PCE 0.1 0.1 -0.2 -0.5 0.1
     PCE, excluding food and energy 0.2 0.2 -0.1 -0.4 0.1
Price indexes: Percent change from month one year ago
     PCE 1.8 1.8 1.3 0.6 0.5
     PCE, excluding food and energy 1.7 1.8 1.7 1.0 1.0

Partially offsetting the decrease in other government social benefits was an increase in unemployment insurance benefits, based primarily on unemployment claims data from the Department of Labor’s Employment and Training Administration. For more information, see “How will the expansion of unemployment benefits in response to the COVID-19 pandemic be recorded in the NIPAs?

The $892.6 billion increase in real PCE in May reflected an increase of $590.4 billion in spending for goods and a $363.8 billion increase in spending for services (table 7). Within goods, spending on motor vehicles and parts as well as recreational goods and vehicles were the leading contributors to the increase. Within services, the largest contributors to the increase were spending for health care as well as food services and accommodations. Detailed information on monthly real PCE spending can be found on Table 2.3.6U.

Personal outlays increased $989.9 billion in May (table 3). Personal saving was $4.12 trillion in May and the personal saving rate — personal saving as a percentage of disposable personal income — was 23.2% (table 1).

Updates to Personal Income and Outlays

Estimates have been updated for January through April. Revised and previously published changes from the preceding month for current-dollar personal income, and for current-dollar and chained (2012) dollar DPI and PCE, are shown below.

Change from preceding month
March April
Previous Revised Previous Revised Previous Revised Previous Revised
(Billions of dollars) (Percent) (Billions of dollars) (Percent)
Personal income:
     Current dollars -413.8 -422.9 -2.2 -2.2 1,965.9 2,018.8 10.5 10.8
Disposable personal income:
     Current dollars -349.0 -353.1 -2.1 -2.1 2,127.8 2,167.9 12.9 13.1
     Chained (2012) dollars -280.9 -281.9 -1.8 -1.8 2,005.4 2,039.9 13.4 13.6
Personal consumption expenditures:
     Current dollars -1,031.7 -988.5 -6.9 -6.6 -1,893.5 -1,757.6 -13.6 -12.6
     Chained (2012) dollars -902.7 -861.3 -6.7 -6.4 -1,662.1 -1,539.8 -13.2 -12.2