Personal Income Rose By Record 10.5% in April, Saving Rate Soared to High at 33%

Washington, D.C. (PPD) — The Bureau of Economic Analysis (BEA) estimated personal income rose $1.97 trillion in April, an unexpected 10.5% gain and largest ever on record. Disposable personal income (DPI) gained $2.13 trillion (12.9%) and personal consumption expenditures (PCE) fell $1.89 trillion (13.6%).

Forecasts for personal income ranged from a low of -9.0% to a high of 10.0%. The consensus forecast was -6.0%. The gain largely reflects social benefits distributed as individual payments included in the CARES Act in response to the coronavirus (COVID-19) pandemic.

Real DPI rose 13.4% in April and Real PCE fell 13.2%. The PCE price index fell 0.5%. Excluding food and energy, the PCE price index declined 0.4%.

Forecasts for the PCE price index ranged from a low of -0.7% to a high of 0.1%. The consensus forecast was -0.6%.

The $1,662.1 billion decline in real PCE reflects a $758.3 billion drop in spending for goods and a $943.3 billion decrease in spending for services. For goods, the overall decline was led by a drop in food and beverages. For services, the largest contributors to the decline were spending for health care, food services and accommodations.

Personal outlays declined $1.91 trillion in April. As an inverse to personal income, it is the largest decline on record for the series.

Personal saving was $6.15 trillion in April and the personal saving rate—personal saving as a percentage of disposable personal income—came in at 33.0%. That is an all-time record high.