May Personal Income and Spending
Updated: 27-Jun-25 09:20 ET





Highlights
  • Personal income declined 0.4% month-over-month in May (Briefing.com consensus +0.4%) following a downwardly revised 0.7% increase (from 0.8%) in April.
  • Personal spending declined 0.1% (Briefing.com consensus +0.2%) following a 0.2% increase in April. Real personal spending declined 0.3%, which will be a drag on Q2 GDP forecasts.
  • The PCE Price Index increased 0.1% month-over-month, as expected, but the core-PCE Price Index jumped 0.2% month-over-month, which was higher than expected (Briefing.com consensus 0.1%). Those moves left the PCE Price Index up 2.3% year-over-year, versus 2.2% in April, and the core-PCE Price Index up 2.7% year-over-year, versus 2.6% in April.
Key Factors
  • The PCE Price Index for Goods was up 0.1% month-over-month and up 0.1% year-over-year versus down 0.4% in April. The PCE Price Index for Services was up 0.2% month-over-month, leaving it up 3.4% year-over-year, unchanged from April.
  • Wages and salaries increased 0.4% month-over-month after increasing 0.4% in April.
  • Rental income was down 0.4% month-over-month after being flat in April.
  • Personal interest income rose 0.2% month-over-month after increasing 0.2% in April. Personal dividend income was down 0.3% month-over-month following a 1.1% decline in April.
  • Real disposable income declined 0.7% month-over-month and was up 1.7% year-over-year versus 2.7% in April. Real personal spending declined 0.3% month-over-month and was up 2.2% year-over-year versus 2.9% in April.
  • The personal savings rate, as a percentage of disposable personal income, decreased to 4.5% from 4.9% in April.
Big Picture
  • The key takeaway from the report is that it has a stagflation aura about it, meaning it is a poor report for the growth outlook and a poor report for the inflation trend. That leaves the Fed between a rock and a hard policy place, yet given the Fed's attention to inflation concerns at this juncture, it seems like a report that will keep the Fed reluctant to cut rates at its July FOMC meeting.
Category MAY APR MAR FEB JAN
Personal Income




Total Income -0.4% 0.7% 0.6% 0.7% 0.5%
Wage and Salary 0.4% 0.4% 0.5% 0.5% 0.2%
Disposable Income -0.6% 0.8% 0.6% 0.7% 0.4%
Savings Rate 4.5% 4.9% 4.4% 4.4% 4.2%
Personal Consumption




Total (Nominal) -0.1% 0.2% 0.7% 0.3% -0.2%
Total (Real, Chain $) -0.3% 0.1% 0.7% -0.1% -0.6%
Core PCE Deflator




Month/Month 0.2% 0.1% 0.1% 0.5% 0.3%
Year/Year 2.7% 2.6% 2.7% 2.9% 2.7%
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