In the Personal Income & Outlays report for April, the BEA noted that “Personal income increased $1.97 trillion (10.5 percent) in April”. This was due to a large increase in transfer payment.
Transfer payments increased by $3 trillion in April. Unemployment insurance increased from $70 billion in March, to $430 billion in April. And “Other” (mostly the CARES Act) increased by $2,600 billion in April.
Without the increase in transfer payments, Personal Income in April would have declined by about 6%.
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 2.8% in March, compared to February, and another 6.3% in April (compared to March).