The U.S. Bureau of Economic Analysis released its estimates of personal income, saving and outlays for May 2010 this morning, and they’re all up. But I wonder: Where is the personal income growth (to $12.3 trillion) coming from? It’s hard to believe in growth when more retail shops and commercial spaces in the neighborhood become vacant. I decided to dive into the numbers, and found some good news: Manufacturing wages and salaries have increased by 3% since December 2009 (they totaled $672 billion in May).
Nonfarm proprietors’ income also grew a strong 2.9% from December, to $1,057 billion in May. The data are seasonally adjusted, so things’re lookin’ up for small business owners and the self-employed. The good national news prompted me to take a closer look at my own numbers, and my unadjusted business revenue for May was up 42% over December 2009 levels. Not bad, especially since I’ve done a good job keeping costs low ~ maybe by the end of the year I’ll find that my proprietor’s income grew, too.
Some groups of people have taken hits: Farm income was down 25% in May (to $30.5 billion) when compared to December 2009. Interest income fell 0.2% from December (no surprise there, with many 1 year CD rates 1% or lower now), to $1,235.6 billion. Dividend income also fell 2.9%, to $549.4 billion (are corporate profits falling, too?).
Personal saving has grown at a faster rate than personal income. Saving as a percent of after tax/disposable income was 4% in May, up from 3.7% in December 2009. Saving as a percent of disposable income reached a low of 0.8% in April 2005 and April 2008.
One month’s good data does not a trend make, but it does appear that income and savings growth has been steady since December. That might explain why there isn’t as much economic angst out there as there was this time last year.