by Calculated Risk on 6/30/2022 08:42:00 AM

The BEA released the Personal Income and Outlays report for May:

Personal income increased $113.4 billion (0.5 percent) in May, according to the Bureau of Economic Analysis. Disposable personal income (DPI) increased $96.5 billion (0.5 percent) and personal consumption expenditures (PCE) increased $32.7 billion (0.2 percent).

Real DPI decreased 0.1 percent in May and Real PCE decreased 0.4 percent; goods decreased 1.6 percent and services increased 0.3 percent. The PCE price index increased 0.6 percent. Excluding food and energy, the PCE price index increased 0.3 percent (
emphasis added

The May PCE price index increased 6.3 percent year-over-year (YoY), unchanged from 6.3 percent YoY in April.

The PCE price index, excluding food and energy, increased 4.7 percent YoY, down from 4.9% in April.

The following graph shows real Personal Consumption Expenditures (PCE) through May 2022 (2012 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

Personal income was at expectations, and the increase in PCE was below expectations.

Inflation was at expectations.

Using the two-month method to estimate Q1 PCE growth, PCE was increasing at a 1.6% annual rate in Q2 2022. (Using the mid-month method, PCE was increasing at 0.7%).