by Calculated Risk on 6/26/2020 08:56:00 AM

NOTE: All of these numbers are on  a seasonally adjusted annual rate basis (SAAR).

In the Personal Income & Outlays report for May, the BEA noted that "Personal income decreased $874.2 billion (4.2 percent) in May". This decrease in Personal Income was due to a large decrease in transfer payments.

Transfer payments decreased by $1.1 trillion in May (SAAR), after increasing $3 trillion in April (SAAR).

Unemployment insurance increased from $70 billion in March (SAAR), to $430 billion in April (SAAR), to $1.28 trillion in May (SAAR).

And "Other" (mostly the CARES Act one time payments) decreased by $2 trillion in May (SAAR).

Without the decrease in transfer payments, Personal Income in April would have increased about 1.5%.

A key measure of the health of the economy (Used by NBER in recession dating) is Real Personal Income less Transfer payments.

Click on graph for larger image.

This graph shows real personal income less transfer payments since 1990.

This measure of economic activity decreased 2.9% in March, compared to February, and another 6.1% in April (compared to March).

This measure increased 1.5% in May compared to April, but is still down 7.5% compared to February (pre-recession).