Personal disposable income inched up ever so slightly in May, but spending growth slowed as Americans opted to save more of their take-home pay.
Income increased 2.9%, not much above April’s level but consistent with increases of the past several months. Disposable, or after-tax, income remains at around $13.3 trillion.
The personal savings rate, or percent of income people did not spend, rose to 2.9% from 2.7% in the prior month. This measure has been on the rise for the past three months, and is a pretty good indication that Americans feel we’re not out of the economic woods yet.
Total personal consumption expenditures growth fell slightly in May on a 12-month smoothed basis, to 4.1% from 4.2% the prior month, and continues to slide from its peak of 4.8% growth in September 2011.
