Personal Income increased 10.5% in April, Spending decreased 13.6%, Core PCE decreased 0.4%

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

Personal income increased $1.97 trillion (10.5 percent) in April according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $2.13 trillion (12.9 percent) and personal consumption expenditures (PCE) decreased $1.89 trillion (13.6 percent).

Real DPI increased 13.4 percent in April and Real PCE decreased 13.2 percent. The PCE price index decreased 0.5 percent. Excluding food and energy, the PCE price index decreased 0.4 percent.

The April PCE price index increased 0.5 percent year-over-year and the April PCE price index, excluding food and energy, increased 1.0 percent year-over-year.

The following graph shows real Personal Consumption Expenditures (PCE) through April 2020 (2012 dollars). Note that the y-axis doesn’t start at zero to better show the change.

Personal Consumption Expenditures Click on graph for larger image.

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

The increase in personal income was way above expectations,  and the decrease in PCE was below expectations.

Note that core PCE inflation was below expectations.