Personal Income Rose 0.7% in May as Consumer Spending Increased

2026-06-26 · Economics · QuoteReporter

Personal Income Rose 0.7% in May as Consumer Spending Increased

In May 2026, personal income in the United States increased by 0.7 percent, reflecting a rise of $181.6 billion, according to the latest data from the Bureau of Economic Analysis (BEA). This growth in personal income was accompanied by a similar increase in personal consumption expenditures (PCE), which also rose by 0.7 percent, or $156.1 billion. The data indicates a robust economic environment where both income and spending are on the rise.

Headline Figures

The BEA reported that the increase in personal income was primarily driven by rises in farm proprietors’ income and compensation. The growth in farm income was notably supported by payments from the American Relief Act of 2025, which included a second round of Supplemental Disaster Relief Program payments issued by the U.S. Department of Agriculture.

Disposable personal income (DPI), which is personal income after taxes, also saw a significant increase of $164.9 billion or 0.7 percent. This increase in DPI suggests that consumers had more income available for spending and saving.

Components & Breakdown

The increase in personal consumption expenditures (PCE) was split between goods and services. Spending on services rose by $94.3 billion, while spending on goods increased by $61.8 billion. This balanced growth in both sectors indicates a broad-based increase in consumer spending.

Real PCE, which accounts for inflation, increased by $43.8 billion or 0.3 percent at a monthly rate. This suggests that the increase in consumer spending was not solely due to price increases but also reflected a genuine rise in the volume of goods and services consumed.

Inflation / Prices

The PCE price index, a key measure of inflation, rose by 0.4 percent in May from the previous month. When excluding the volatile categories of food and energy, the PCE price index increased by 0.3 percent. On a year-over-year basis, the PCE price index was up by 4.1 percent, while the core PCE price index (excluding food and energy) increased by 3.4 percent.

These inflation figures suggest that while prices are rising, the rate of increase is moderate, which could influence future monetary policy decisions.

What Comes Next

The BEA has scheduled the next release of the Personal Income and Outlays report for June 2026 on July 30, 2026. Additionally, the annual updates of the National and Regional Economic Accounts are set to begin on September 30, 2026. These updates will include revisions to GDP, personal income, and related statistics, reflecting improvements in data collection and analysis.

Overall, the May 2026 data release from the BEA highlights a period of economic growth characterized by rising incomes and consumer spending, alongside moderate inflation. These trends will be closely monitored in the coming months as they have significant implications for economic policy and market conditions.