n May 2025, the Bureau of Economic Analysis (BEA) reported that personal income in the United States declined by $109.6 billion, or 0.4% compared to the previous month. At the same time, disposable personal income (DPI), which measures income after taxes, dropped by $125.0 billion or 0.6%. Consumer spending, measured by personal consumption expenditures (PCE), also fell slightly, decreasing by $29.3 billion (0.1%).
Personal outlays which include consumer spending, interest payments, and transfers were down by $27.6 billion. As a result, personal savings reached $1.01 trillion, with the personal saving rate holding steady at 4.5%.
Personal Income Details
The decline in personal income largely reflected a reduction in government social benefit payments and farm proprietor income. These decreases were only partially offset by increases in wages and salaries. Employee compensation rose by $43.4 billion in May, with a $35.9 billion gain in service-producing industries and a $7.5 billion rise in goods-producing sectors.
Proprietors’ income saw a net decrease of $14.6 billion, which included an $11.6 billion decline in farm income and a $3.0 billion drop in nonfarm proprietor income. Meanwhile, receipts on assets (such as interest and dividends) rose by $11.9 billion.
Current transfer receipts, which include government benefits, decreased by $152.6 billion. This drop reflects several changes, including a decline in “other” government social benefits primarily due to the expiration of certain pandemic-related assistance programs, and a reduction in state unemployment insurance benefits.
Spending and Prices
Real personal consumption expenditures (PCE), adjusted for inflation, declined by 0.3% in May. Spending on goods dropped by 0.8%, while spending on services edged down by 0.1%. Price increases in services, including housing and utilities, were offset by lower prices for goods, especially gasoline and motor vehicles.
The PCE price index — a measure of inflation — increased by 0.1% from April to May. Excluding food and energy, the core PCE price index also rose by 0.1%. Compared to the same month last year, the overall PCE price index increased by 2.3%, while the core PCE inflation rate stood at 2.6%.
Updates and Revisions
The estimates provided include revised and updated data from multiple sources. April figures were updated to reflect more complete reporting:
Personal income for April was revised upward from a 0.3% increase to a 0.4% rise.
DPI growth in April was also adjusted up from 0.2% to 0.3%.
Real PCE growth for April was revised down slightly from 0.5% to 0.4%.
The BEA will release its Annual Update of the National Economic Accounts, including GDP and related components, on September 26, 2025. That revision will incorporate new benchmark data, revised seasonal adjustments, and methodological enhancements to improve accuracy.
U.S. International Transactions, First Quarter 2025 & Annual Revisions
