The Bureau of Economic Analysis (BEA) reports that personal income decreased in May to a seasonally adjusted annual rate (SAAR) of $19.839 billion. The decrease in personal income is being attributed to the decline in government social benefits, the majority of which came from the one-time stimulus checks which were paid in in April. Real disposable income (income remaining after adjusting for taxes and inflation) was down -5.0% in May after a 13.6% increase in April. Personal consumption expenditures (PCE) rose 8.2% after a historical plunge of -12.6% in April when businesses were shut down and households were complying with the ‘stay-at-home’ orders. In May, more consumers were back to shops and restaurants as the economy has gradually reopened. The rise in consumer spending In May and the drop in personal income draw the personal savings rate down to 23.2%, compared to a record high savings rate of 32.2% in April. Personal savings stood at $4.12 billion (SAAR) in May, still triple the amount of savings in March.
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