by Calculated Risk on 6/27/2025 08:30:00 AM
From the BEA: Personal Income and Outlays, May 2025
Personal income decreased $109.6 billion (0.4 percent at a monthly rate) in May, according to estimates released today by the U.S. Bureau of Economic Analysis. Disposable personal income (DPI)—personal income less personal current taxes—decreased $125.0 billion (0.6 percent) and personal consumption expenditures (PCE) decreased $29.3 billion (0.1 percent).
Personal outlays—the sum of PCE, personal interest payments, and personal current transfer payments—decreased $27.6 billion in May. Personal saving was $1.01 trillion in May and the personal saving rate—personal saving as a percentage of disposable personal income—was 4.5 percent.
From the preceding month, the PCE price index for May increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.2 percent.
From the same month one year ago, the PCE price index for May increased 2.3 percent. Excluding food and energy, the PCE price index increased 2.7 percent from one year ago.
emphasis added
The May PCE price index increased 2.3 percent year-over-year (YoY), up from 2.1 percent YoY in April, and down from the recent peak of 7.2 percent in June 2022.
The following graph shows real Personal Consumption Expenditures (PCE) through May 2025 (2017 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 and PCE were below expectations.
Inflation was above expectations.
Using the two-month method to estimate Q2 real PCE growth, real PCE was increasing at a 2.4% annual rate in Q2 2024. (Using the mid-month method, real PCE was increasing at 2.0%). This suggests moderate PCE growth in Q2.