John Carney 29 May 2020
The government’s efforts to support the U.S. economy by sending checks to taxpayers and enhancing unemployment benefits led to soaring income but most of that money was saved as American consumers pulled back on spending in April.
Personal income rose 10.5 percent in April, Commerce Department data showed Friday. Economists had forecast a six percent decline in income due to rising joblessness and a shrinking economy.
The $1.97 trillion increase in personal income is likely largely due to enhanced unemployment benefits and the coronavirus payments the U.S. Treasury issued in April. The federal government now chips in an extra $600 per week to unemployment payments, which has allowed some workers to earn more in jobless benefits than they did in wages when still on the job.
Disposable personal income, which is income after taxes, rose by $2.13 trillion.
The government payments may have prevented income from collapsing but they did not “stimulate†the economy by much. Consumer spending in the U.S. fell 13.6 percent in April, a $1.91 trillion decline. Economists had expected a 12.6 percent decrease. It may be that spending would have fallen by even more without the rise in income.
The personal saving rate surged to 33 percent, the highest ever level, as Americans set aside $6.15 trillion. Typically, this has been between seven and eight percent in recent years. The prior high, recorded in 1975, was 17.3 percent.
more
https://www.breitbart.com/economy/2020/05/29/u-s-incomes-soared-10-5-in-april-and-saving-rate-hit-highest-level-ever/
