WASHINGTON — U.S. personal income rose in the latest monthly economic data release, supported by gains in compensation and farm income, while consumer spending also increased, according to figures published by the U.S. Bureau of Economic Analysis (BEA).
The BEA said personal income increased by $181.6 billion, or 0.7% on a monthly basis, in May, following no change in April. Disposable personal income, which measures income after taxes, also rose 0.7%, while personal consumption expenditures (PCE) increased by $156.1 billion, or 0.7%, reflecting continued household spending despite elevated inflation.
The increase in personal income was driven primarily by higher compensation and gains in farm proprietors' income, the agency said. Spending growth was broad-based, with expenditures on services rising by $94.3 billion and spending on goods increasing by $61.8 billion.
Personal outlays, which include consumer spending, interest payments and transfer payments, rose by $159.9 billion during the month. Personal saving totaled $704.2 billion, leaving the personal saving rate at 3.0% of disposable personal income, according to the report.
The monthly data were released as policymakers and investors continue to assess the strength of household finances alongside inflation and labor market conditions. The PCE price index, the Federal Reserve's preferred inflation measure, increased 4.1% from a year earlier in May, indicating that price pressures remained above the U.S. central bank's long-run 2% target.
Recent economic indicators have presented a mixed picture. Separate government data released earlier this month showed U.S. job growth slowed sharply in June, although the unemployment rate edged lower, suggesting the labor market has cooled while remaining relatively resilient.
The BEA noted that its latest release also reflects information related to the annual update of the National Economic Accounts, which revises and improves estimates across national, industry, state and county statistics. The agency said the revisions affect personal income and outlays as well as other national accounts.
The next Personal Income and Outlays report, covering June data, is scheduled for release on July 30, according to the BEA.
