May U.S. Personal Income Outpaced Consumption Expenditures

The improving U.S. economy is having a positive effect on personal savings as well as wages and salaries, new government data show.

Total personal income among U.S. residents in May climbed by $58.8 billion as disposable personal income (DPI) rose $55.6 billion. Both increases represented 0.4 percent gains from April, according to the Commerce Department’s Bureau of Economic Analysis. Total personal consumption expenditures (PCE) increased $18.3 billion, or 0.2 percent.

The May price index for PCE increased 1.8 percent from May a year ago. The May PCE price index, excluding food and energy, increased 1.5 percent from last May, the bureau’s data show. Both increased by 0.2 percent from April.

Real DPI, or DPI adjusted to remove price changes, increased 0.2 percent in May, the same increase as in April. Real PCE, adjusted to remove price changes, decreased 0.1 percent in May, compared with a decrease of 0.2 percent in April, the bureau said.

Purchases of durable goods increased 1 percent, in contrast to a 0.9 percent. decrease in April. Purchases of motor vehicles and parts accounted for more than half of the increase in May, and more than accounted for the decrease in April. Purchases of nondurable goods decreased 0.3 percent in May,  compared with a decrease of 0.1 percent in April. Purchases of services decreased 0.2 percent, compared with a decrease of 0.1 percent, the bureau’s data show.

Private wages and salaries increased by $27.8 billion last month, up from April’s increase of $17.9 billion. Supplements to wages and salaries by $3.7 billion, which was up from April’s $3.3 billion increases.

Proprietors’ income rose $3.4 billion, down from April’s $8 billion increase. Farm proprietors’ income was up $2.3 billion, up slightly from April’s $2.2 billion boost. Nonfarm proprietors’ income rose just $1.1 billion in May, down from April’s $5.8 billion increase.

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