News Release
Personal Income and Outlays, May 2008
May 2008
Personal income increased $225.7 billion, or 1.9 percent, and disposable personal income (DPI)
increased $600.3 billion, or 5.7 percent, in May, according to the Bureau of Economic Analysis.
Personal consumption expenditures (PCE) increased $77.4 billion, or 0.8 percent. In April, personal
income increased $33.5 billion, or 0.3 percent, DPI increased $39.8 billion, or 0.4 percent, and PCE
increased $41.1 billion, or 0.4 percent, based on revised estimates.
Real disposable income increased 5.3 percent in May, compared with an increase of 0.1 percent in
April. Real PCE increased 0.4 percent, compared with an increase of 0.2 percent.
2008
Jan. Feb. Mar. Apr. May
(Percent change from preceding month)
Personal income, current dollars 0.2 0.5 0.3 0.3 1.9
Disposable personal income:
Current dollars 0.4 0.5 0.3 0.4 5.7
Chained (2000) dollars 0.1 0.3 0.0 0.1 5.3
Personal consumption expenditures:
Current dollars 0.5 0.1 0.5 0.4 0.8
Chained (2000) dollars 0.2 -0.1 0.2 0.2 0.4
The May and April changes in disposable personal income (DPI) -- personal income less
personal current taxes -- were boosted as a result of provisions of the Economic Stimulus Act of
2008. The federal government issued rebate payments of $48.1 billion in May ($577.1 billion at
an annual rate) and $1.9 billion in April ($23.3 billion at an annual rate). These payments
reduced personal current taxes and increased government social benefit payments. As a result,
disposable personal income increased substantially. Excluding these special factors, which are
discussed more fully below, disposable personal income increased $46.4 billion or 0.4 percent in
May, after increasing $16.6 billion, or 0.2 percent, in April.
Wages and salaries
Private wage and salary disbursements increased $15.9 billion in May, in contrast to a decrease
of $9.6 billion in April. Goods-producing industries' payrolls increased $1.7 billion, in contrast to a
decrease of $6.8 billion; manufacturing payrolls increased $1.1 billion, in contrast to a decrease of
$2.7 billion. Services-producing industries' payrolls increased $14.3 billion, in contrast to a
decrease of $2.9 billion. Government wage and salary disbursements increased $3.7 billion,
compared with an increase of $4.0 billion.
Other personal income
Supplements to wages and salaries increased $4.3 billion in May, the same increase as in April.
Proprietors' income increased $6.4 billion in May, compared with an increase of $4.3 billion in
April. Farm proprietors' income increased $3.0 billion, compared with an increase of $2.1 billion.
Nonfarm proprietors' income increased $3.4 billion, compared with an increase of $2.2 billion.
Rental income of persons increased $10.0 billion, compared with an increase of $9.8 billion.
Personal income receipts on assets (personal interest income plus personal dividend income)
increased $1.0 billion, compared with an increase of $0.6 billion.
Personal current transfer receipts increased $186.8 billion in May, compared with an increase
of $19.3 billion in April. Provisions of the Economic Stimulus Act of 2008 boosted the level of
personal current transfer receipts by $179.6 billion at an annual rate in May and $7.8 billion at an
annual rate in April. The increase reflected payments to individuals who either paid no income tax
or whose payment exceeded the amount of income tax paid (see box below).
Contributions for government social insurance -- a subtraction in calculating personal income --
increased $2.4 billion in May, in contrast to a decrease of $0.9 billion in April.
Personal current taxes and disposable personal income
Personal current taxes decreased $374.5 billion in May, compared with a decrease of $6.4
billion in April. A reduction in federal income taxes accounted for the decreases in May and in
April. Provisions of the Economic Stimulus Act of 2008 reduced the level of personal current taxes
by $397.5 billion at an annual rate in May and $15.5 billion at an annual rate in April. The
reduction in current personal taxes reflected rebate payments to eligible individual taxpayers (see
box below).
Disposable personal income (DPI) -- personal income less personal current taxes -- increased
$600.3 billion, or 5.7 percent, in May, compared with an increase of $39.8 billion, or 0.4 percent, in
April.
Personal outlays and personal saving
Personal outlays -- PCE, personal interest payments, and personal current transfer payments
increased $84.3 billion in May, compared with an increase of $47.9 billion in April. PCE increased
$77.4 billion, compared with an increase of $41.1 billion.
Personal saving -- DPI less personal outlays -- was $555.7 billion in May, compared with $39.7
billion in April. Personal saving as a percentage of disposable personal income was 5.0 percent in
May, compared with 0.4 percent in April. Saving from current income may be near zero or negative
when outlays are financed by borrowing (including borrowing financed through credit cards or home
equity loans), by selling investments or other assets, or by using savings from previous periods. For
more information, see the FAQs on "Personal Saving" on BEA's Web site. For a comparison of
personal saving in BEA's national income and product accounts with personal saving in the Federal
Reserve Board's flow of funds accounts and data on changes in net worth (which help finance
consumption), go to /bea/dn/nipaweb/Nipa-Frb.asp.
Real DPI and real PCE
Real DPI -- DPI adjusted to remove price changes -- increased 5.3 percent in May, compared
with an increase of 0.1 percent in April.
Real PCE -- PCE adjusted to remove price changes -- increased 0.4 percent in May, compared
with an increase of 0.2 percent in April. Purchases of durable goods increased 0.1 percent, compared
with an increase of less than 0.1 percent. Purchases of nondurable goods increased 0.4 percent in
May, the same increase as in April. Purchases of services increased 0.4 percent in May, compared
with an increase of 0.1 percent in April.
The price index for PCE increased 0.4 percent in May, compared with an increase of 0.2
percent in April. Prices, excluding food and energy, increased 0.1 percent in May, the same increase
as in April.
Revisions
Estimates have been revised for January through April. Changes in personal income, current-
dollar and chained (2000) dollar DPI, and current-dollar and chained (2000) dollar PCE for March
and April -- revised and as published in last month's release -- are shown below.
Change from preceding month
March April
Previous Revised Previous Revised Previous Revised Previous
Revised
(Billions of dollars) (Percent) (Billions of dollars) (Percent)
Personal Income:
Current dollars...................... 44.7 40.9 0.4 0.3 20.1 33.5 0.2 0.3
Disposable personal income:
Current dollars...................... 35.4 31.8 0.3 0.3 23.4 39.8 0.2 0.4
Chained (2000) dollars............... 2.7 -1.0 0.0 0.0 -1.0 13.0 0.0 0.1
Personal consumption expenditures:
Current dollars...................... 41.7 54.8 0.4 0.5 21.4 41.1 0.2 0.4
Chained (2000) dollars............... 9.1 19.4 0.1 0.2 -1.7 14.8 0.0 0.2
Economic Stimulus Act of 2008
The Economic Stimulus Act of 2008 provides rebate payments to eligible individual taxpayers as
well as tax reductions for businesses. For individuals, the amount of the rebate is determined by
information reported on tax filings for 2007 and is based on filing status, level of adjusted gross income,
and the number of qualifying children. According to the Joint Committee on Taxation and the
Congressional Budget Office, rebates to individuals are expected to total $106.7 billion for 2008. The
majority of rebates will be sent during the initial round of payments, which began April 28, 2008, and
will continue on a weekly basis through mid-July 2008.
In the NIPAs, rebates for residents of the 50 states and the District of Columbia will be recorded as
either an offset to personal current taxes or as a social benefit payment to persons. Rebates for
individuals with tax liabilities that exceed the rebate amount will be treated as an offset to personal
current taxes in the NIPAs. Rebates for individuals who pay no income taxes (or for whom the rebate
would exceed the amount of the income taxes they do pay) will be treated as a government social
benefit
payment to persons in the NIPAs.
Annual Revision of the National Income and Product Accounts
As part of the annual revision of the national income and product accounts, revised estimates of
personal income and outlays covering January 2005 through May 2008 will be released along with
preliminary estimates for June 2008 on August 4. An article describing the revision will appear in the
August 2008 issue of the Survey of Current Business.
BEA's national, international, regional, and industry estimates; the Survey of Current
Business; and BEA news releases are available without charge on BEA's Web site at www.bea.gov.
By visiting the site, you can also subscribe to receive free e-mail summaries of BEA releases and
announcements.
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Next release --August 4, 2008 at 8:30 A.M. EDT for Personal Income and Outlays for June.