Personal Income increased 0.4% in May, Spending increased 0.1% - InvestingChannel

Personal Income increased 0.4% in May, Spending increased 0.1%

The BEA released the Personal Income and Outlays report for May:

Personal income increased $67.1 billion (0.4 percent) in May according to estimates released today by the Bureau of Economic Analysis. … personal consumption expenditures (PCE) increased $7.3 billion (0.1 percent).

Real PCE increased 0.1 percent. The PCE price index decreased 0.1 percent. Excluding food and energy, the PCE price index increased 0.1 percent.

The May PCE price index increased 1.4 percent year-over-year and the May PCE price index, excluding food and energy, increased 1.4 percent year-over-year.

The following graph shows real Personal Consumption Expenditures (PCE) through May 2017 (2009 dollars). Note that the y-axis doesn’t start at zero to better show the change.

Personal Consumption Expenditures Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

The increase in personal income was above expectations,  and the increase in PCE was at expectations.

Using the two-month method to estimate Q2 PCE growth, PCE was increasing at a 3.5% annual rate in Q2 2017. (using the mid-month method, PCE was increasing 3.7%). This suggests decent PCE growth in Q2.

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