The BEA released the Personal Income and Outlays report for May:
Personal income decreased $414.3 billion (2.0 percent) in May according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) decreased $436.3 billion (2.3 percent) and personal consumption expenditures (PCE) increased $2.9 billion (less than 0.1 percent).
Real DPI decreased 2.8 percent in May and Real PCE decreased 0.4 percent; goods decreased 2.0 percent and services increased 0.4 percent. The PCE price index increased 0.4 percent. Excluding food and energy, the PCE price index increased 0.5 percent.
The May PCE price index increased 3.9 percent year-over-year and the May PCE price index, excluding food and energy, increased 3.4 percent year-over-year.
The following graph shows real Personal Consumption Expenditures (PCE) through May 2021 (2012 dollars). Note that the y-axis doesn’t start at zero to better show the change.
The dashed red lines are the quarterly levels for real PCE.
Personal income was above expectations, and the increase in PCE was below expectations.
Using the two-month method to estimate Q2 PCE growth, PCE was increasing at a 16.2% annual rate in Q2 2021. (using the mid-month method, PCE was increasing at 18.2%). However, this reflects the impact of the American Rescue Plan in April and May, and overall Q2 growth will be lower than those estimates.