Personal income boosted by stimulus
Paychecks swelled by 1.4% last month, pulled higher by an increase in unemployment benefits and lower taxes.
NEW YORK (CNNMoney.com) -- Personal income jumped more than expected, helped by an increase in unemployment benefit payments and lower taxes, while consumer spending edged higher, the government said Friday.
The Commerce Department said that personal income rose 1.4% in May, compared with an upwardly revised 0.7% increase in April. Analysts had expected a 0.3% increase, according to a consensus from Briefing.com.
Spending by individuals edged up 0.3% in May -- in line with economists' estimates. April was revised to show that consumer spending was flat.
Taking inflation into account, the spending rate rose by 0.2%. This so-called PCE Core was higher than the 0.1% rate that economists were expecting.
Even as consumers spent some of their extra dollars, they were more interested in socking away cash than they have been in more than a decade.
Personal saving as a percentage of disposable personal income was 6.9% in May, an increase from the 5.6% increase in April. The savings rate was the highest level in more than 15 years, going back to December 1993.