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Nominal personal income increased at a nonannualized rate of 0.5 percent in May, following increases of 0.3 percent in March and 0.1 percent in April. Over the past 12 months, nominal personal income has increased 3.3 percent. Disposable personal income (DPI)?nominal personal income less current personal taxes?also increased 0.5 percent for the month and is up 2.2 percent since May of last year. After controlling for price changes, real disposable personal income increased 0.4 percent in May, following increases of 0.3 percent in each of the prior two months, and is up 1.2 percent on a year-over-year basis.
Real personal consumption expenditures increased 0.2 percent in May, which follows a slight 0.1 percent decline in April. The improvement in overall consumption in May came entirely from consumption of goods. Consumption of durable and nondurable goods increased 1.0 and 0.5 percent, respectively, while services consumption decreased 0.1 percent. Since last year, overall consumption is up 1.8 percent, and the 12-month change in consumption has consistently been between 1.5 and 2.0 percent since the end of 2011. The larger improvement in personal income relative to consumption in May caused the personal savings rate to increase to 3.2 percent.