Social Security payment timings distorted income in May.
Personal Current Transfer Receipts
Personal Current Transfer Receipts (PCTR) are government payments for which no current services are rendered.
Examples include Medicare, Medicaid, housing assistance, SNAP (food stamps) unemployment insurance, and veteran’s benefits.
Social Security Reported Decline
The BEA reported Social Security declined $122 billion annualized in May. That’s a decline of 7.27 percent. But that didn’t happen.
In my previous post, I explained …
Social Security payments were not down in May; they were simply distributed later in the month than usual due to the Social Security Administration (SSA)’s payment schedule. Specifically, the second Wednesday of May, which is the payment date for those with birthdays between the 1st and 10th, fell on May 14th, making it the latest possible date for the first round of payments in any month.
The above snip is AI-Generated. It appears the BEA did not capture all Social Security income.
This is confirmed by other numbers.
Personal Income in Billions of US Dollars
Month-Over-Month Personal Income
- Personal Income: -0.43 percent
- Disposable Personal Income: -0.55 percent
- Personal Income Minus PCTR: +0.28 percent
Disposable means after taxes.
However, it’s real personal income that drives GDP.
Real Personal Income Billions
Month-Over-Month Real Personal Income
- Real Personal Income: -0.56 percent
- Real Disposable Personal Income: -0.69 percent
- Real Personal Income Minus PCTR: -0.13 percent
Those are poor numbers but not as bad as the touted headline numbers.
The NBER, the official arbiter of recessions, uses Real Personal Income Minus PCTR in its determinations.
PCE Price Index
The BEA says the month-over-month PCE price index rose 0.1 percent.
Carried to three decimal places, I calculate PCE Price Index M/M as 0.135 percent.
Rounding cause the BEA to over-report M/M income and spending, and understate inflation.
Personal Income and Spending Unexpectedly Decline in May
For more discussion please see Personal Income and Spending Unexpectedly Decline in May
Economists missed the boat by a mile on income and expenditures.
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Welcome to another nasty set of trade data numbers.
June 26, 2025: Unexpected Huge Negative Revisions to First-Quarter GDP and What it Means
The BEA revised GDP lower by 0.3 percentage points. The details are worse.
When “adjusting” the numbers to find the “truth”, the truth is often lost.
Perhaps I should have written “discarded.”
The “Wealth Effect” has been quite positive since the tariff shock and spending by the investor class has been triggered again. Gas prices have fallen a bit (not in my area) and this allows family vacations and visits to relatives.
The “Wealth Effect” can be ascribed to income indirectly or directly by the observers preference. Stock account balances do create security and more importantly the security to spend.
Other clouds do exist and especially for those involved in farming or, better named agri-business. Falling crop prices indicate lower income or even losses for farmers and this has a large negative effect on rural economies.
The world hung in the balance ~ It still does!
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Lots of great data analysis on this site. Question: Is the gloomy tone truly warranted?
Q1 GDP: fake negative. Q2: fake positive. Q3: bearish. Demand for depleted
military hardware is high. Without a change we cannot exert power. The risk to our – and our friends – national security is high. $15T of foreign investment poured in. Only 10%/20% are completed. Demand for highly skilled workers will be high. The mfg sector profit popped up to the $700B/$750B level. They stalled for a year and a half. They might drop, along with SPX, before rising to a new all time high (to $1T area), along with the banking sector. Trillions on the sideline will pour in. Those that grudgingly went down, or stayed high, are the best.
Timing is everything:
it only took 293 days for a supreme court nomination to expire…
so a conservative majority today…
can let the executive branch play.
Helpful. One of those mornings where you say, ouch, numbers look bad, then the bid comes in.
PLTR plunged
Regarding the release of government stats, some things will NEVER change.
Lies, damned lies and “government sadistics.”
Trump just had a hissy fit with Canada and now says no trade deal with them. Start the TACO timer now!
https://www.cnbc.com/2025/06/27/trump-canada-trade-talks-tariffs.html
Trump got rid of two Pierres
7 Days? President Puddin’ Pants won’t remember any of this in 7 days.
He just wasn’t getting enough attention.
“90 deals in 90 days”
2 frameworks of a deal
The more illegal immigrants that are deported, the more that personal income will drop. The loss of immigrants is deflationary, not inflationary as politicians like to claim (due to “wage pressures” they claim. Lol!)
Well, if the people that hired those immigrants want to continue, they gotta hire white boys, and white boys don’t work near as hard or for that litte.
No kidding!
Enjoy your posts!
Correct, you can not build without cheap labor. Projects are grinding to a halt and until some other class of workers finds the existing or higher wages appealing for this type of hard work, people will sit on the sidelines. Materials delivery will be delayed and costs will rise precipitously due to inefficiencies and job training and lack of continuity. My expectation is that wages will have to rise eventually for laborers and the productivity will be lower.
We all loose by deporting hard working, but undocumented laborers.
Trump calls them criminal, yet provides amnesty for insurrectionists that storm our Nations Capitol and injure police. The tell is in…
We have an active dictator as President.
;-(
Insurrection is a Democrat Party propaganda campaign. Apparently, the Capitol Police fired on the protestors just standing on the lawn in front of the Capitol steps, without warning, precipitating what followed.
Getting ahead of your GDPNow report:
2.9% as of today
I’m sure you’ll do a deep dive, but the obvious point for me is that Net Exports widened from ~2% since early June to 3.49%. Also, change in private inventories takes a very large dive of -2.22%, so it looks like businesses are plowing through their front-loaded purchases.
When front loading began, I noted there wasn’t enough front loading to make any real savings in future tariffs. But it looks like consumers have front loading based on inventory. Pulling demand forward can reduce future sales (recession).
There’s simply no telling when the next recession will arrive. My base case continues to be that $2T in deficit spending is very anti-recessionary, and I say that agreeing with your point.