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The most recent data release from the Bureau of Economic Analysis (BEA) showed that personal income surged in April to a seasonally adjusted annual rate (SAAR) of $20,674 billion. The 10.5% increase in personal income was largely the effects of Federal Pandemic Response Programs. Among the $360.5 billion increase in unemployment insurance, there were $132.0 billion in Pandemic Unemployment Compensation Payments, $24.5 billion in Pandemic Unemployment Assistance, and $0.7 billion in Pandemic Emergency Unemployment Compensation. However, compensation declined around 7.7% in April, after a 3.2% drop in March.

Real disposable income (income remaining after adjusting for taxes and inflation) was up 13.4% after a 1.8% loss in March. Personal consumption expenditures (PCE) plunged 13.6% in April after a decline of 6.9% in March. This unprecedented 13.6% decline was the steepest monthly decline since 1959, as businesses were shut down and households complied with the ‘stay-at-home’ orders.

In April, the rise in personal income and the drop in consumer spending pushed the personal savings rate to 33%. Personal savings increased to $6.15 billion (SAAR), almost triple the amount of savings in March. This record high savings rate reflects a slowdown in spending and economic growth during the COVID-19 pandemic.