Stimulus Checks Boost Incomes, Spending

Washington, DC, June 27, 2008--Federal economic stimulus payments boosted household finances in May, sending after-tax incomes up by the largest amount in 33 years, according to the Commerce Department.

The payments helped boost consumer spending by the largest amount in six months.

The government reported that disposable incomes rose by 5.7 percent last month. It was the biggest increase since May 1975, reflecting $48.1 billion in rebate payments made last month. That helped boost consumer spending by 0.8 percent, the biggest gain since last November.

For May, overall incomes rose by 1.9 percent after a 0.3 percent rise in April. After-tax incomes surged by 5.7 percent in May after a 0.4 percent rise in the month before.

Also, consumer spending jumped by 0.8 percent, double the 0.4 percent gain in April.