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The BEA's Personal Income and Outlays Report has the curious details of an unexpected ride.

Income and Outlays

  • Income: +10.5%
  • Disposable Personal Income: +12.9%
  • Real Disposable Income: +13.4%
  • Personal Consumption Expenditures: -13.6%
  • Real Personal Consumption Expenditures: -13.2%


  • PCE Price Index: -0.5%
  • PCE Price Index Excluding Food and Energy: -0.4%
  • PCE Price Index Year-Over-Year: +0.5%
  • PCE Price Index Year-Over-Year Excluding Food and Energy: +1.0%

Consumer Spending Falls a Record 13.6%

The Wall Street Journal reports Consumer Spending Falls a Record 13.6%

Personal income, which includes wages, interest and dividends, increased 10.5% in April, the Commerce Department reported Friday. The jump reflected a sharp rise in government payments through federal rescue programs, primarily one-time household stimulus payments of $1,200. Unemployment insurance payments also rose sharply in April, helping make up for some of the 8% decline in wages and salaries tied to job losses.

The April drop in spending was the steepest for records tracing back to 1959. Weak April spending adds to the evidence that the U.S. economy is in for a long, slow recovery. 

Consumers pulled back on services, cutting spending on restaurants and hotels by half compared with April 2019. Health-care expenditures fell nearly 40% from a year ago.

Stimulus Checks

The stimulus checks of $1,200 are one time and the effect will roll off. 

The WSJ cites a study by the Chicago Fed that consumers spent almost half of their federal stimulus checks in the two weeks after receiving them.

Check distribution was uneven. People received a check if they were below a certain income level whether or not they lost any income to Covid-19.

Mortgage and auto loan forbearance plans surged despite the alleged increase in income.

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What Did Economists Expect?

The Bloomberg Econoday consensus estimate was for personal income to sink 6.0%, not rise 10.5%.

So if you were shocked by this report, you were not the only one.

Revision Coming?

Covid-19 Impact on Income and Outlays

Perhaps this jump in income is really a mirage. 

The BEA notes "The full economic effects of the  COVID-19 pandemic cannot be quantified in the personal income and outlays estimate for April because the impacts are generally embedded in source data and cannot be separately identified."

As with the unemployment rate, wonders if the BEA as with the BLS is posting known unemployment rate garbage. 

6.4 Million Discrepancy Between Employment and Unemployment

For details on the BLS posting admittedly bogus numbers, please consider  A 6.4 Million Discrepancy Between Employment and Unemployment

At Least for a While, It Pays Better to Be Unemployed

Returning back to the income discrepancy mote that for some, At Least for a While, It Pays Better to Be Unemployed