Spending Increased 8.2% in May
Washington, DC, June 26, 2020--Personal income decreased $874.2 billion (4.2%) in May, according to estimates released by the Bureau of Economic Analysis, while personal consumption expenditures (PCE) increased $994.5 billion (8.2%), and disposable personal income (DPI) decreased $911.1 billion (4.9%).
Real DPI decreased 5.0% in May, and Real PCE increased 8.1%. The PCE price index increased 0.1%. Excluding food and energy, the PCE price index increased 0.1%.
“Americans increased spending at a record pace in May, helping the economy dig out of a severe recession, but a new rise in virus infections threatens the nascent recovery,” reports the Wall Street Journal in an article titled “U.S. Consumer Spending Rebounded in May, but Virus Surge Poses Economic Threat.
“Personal consumption-how much Americans spent on goods and services-rose 8.2% in May from a month earlier, the Commerce Department said Friday. That was more than double the prior all-time high since record-keeping began in 1959.
“Household spending on long-lasting items like cars, refrigerators and sofas drove the growth. Spending on services also climbed.
“Consumer spending, which represents more than two-thirds of economic demand in the U.S., remained far below prepandemic levels-down 12% from February. It isn’t clear if Americans will continue to spend at May’s pace. One factor that likely drove the boost was a surge in money from federal stimulus checks and unemployment benefits.”