Data recently released by the Bureau of Economic Analysis (BEA) is reporting that personal income surged in April to a seasonally adjusted annual rate (SAAR) of $ 20,674 billion. The 10.5% increase in personal income was largely the result of the Federal Pandemic Response Program. Real disposable income (income remaining after adjusting for taxes and inflation) was up 13.4% after a -1.8% loss in March. Personal consumption expenditures (PCE) plunged -13.6% in April, the steepest decline since 1959. On the positive side in April, the rise in personal income and the drop in consumer spending pushed the personal savings rate to 33%. Personal savings increased to $6.15 billion (SAAR), almost triple the amount of savings in March. This record high savings rate reflects a slowdown in spending and economic growth during the COVID-19 pandemic.
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