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Americans Earned More but Spent Less in May

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.

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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.

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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.

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