Consumer spending and income growth slows in May to 0.4%

Personal income in May increased $38.3 billion, or 0.4% after a 0.7% gain in April, according to the Commerce Department. Personal spending (Personal Consumption Expenditure - PCE) also slowed in may to an increase of $40.3 billion, or 0.4%, after a 0.7% jump in April. 

Personal saving was a negative $162.9 billion in May, compared with a negative $153.5 billion in April. Personal saving as a percentage of disposable personal income was a negative 1.7% in May, compared with a negative 1.6% in April. The savings rate has been negative for 12 consecutive months, as Americans are dipping into savings or borrowing more to finance a spending level that is exceeding their after-tax incomes. 

The PCE price index increased 0.4% in May, compared with an increase of 0.5% in April. The PCE price index, excluding food and energy, increased 0.2%, the same increase as in April.

 

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