Here are Jake’s information-loaded charts showing that May’s increase in income reflects an increase in social benefit payments – unemployment benefits doubled in the last year.
Courtesy of Jake at EconompicData
The income of Americans soared in May because of the government’s economic stimulus, leading them to increase spending modestly and boost the saving rate to the highest in 15 years.
Personal income rose at a seasonally adjusted rate of 1.4% compared to the month before, the Commerce Department said Friday. The jump reflected reduced taxes and increased social benefit payments unleashed by the stimulus package.
Up? Yes. Soared? No. Looking at year over year figures, personal income continues to show anemic (or in disposable personal income terms negative) growth.
Was stimulus the savior? Well, if you classify unemployment (and the extension of these benefits), then yes. The amount of unemployment benefits paid out has doubled in the past 12 months.