Personal income boosted by stimulus

[BC-NanceLee]

Paychecks swelled by 1.4% last month, pulled higher by an increase in unemployment benefits and lower taxes.

Last Updated: June 26, 2009: 9:12 AM ET

NEW YORK (CNNMoney.com) -- Personal income jumped more than expected, helped by an increase in unemployment benefit payments and lower taxes, while consumer spending edged higher, the government said Friday.

The Commerce Department said that personal income rose 1.4% in May, compared with an upwardly revised 0.7% increase in April. Analysts had expected a 0.3% increase, according to a consensus from Briefing.com.

Spending by individuals edged up 0.3% in May -- in line with economists' estimates. April was revised to show that consumer spending was flat.

Taking inflation into account, the spending rate rose by 0.2%. This so-called PCE Core was higher than the 0.1% rate that economists were expecting.

Even as consumers spent some of their extra dollars, they were more interested in socking away cash than they have been in more than a decade.

Personal saving as a percentage of disposable personal income was 6.9% in May, an increase from the 5.6% increase in April. The savings rate was the highest level in more than 15 years, going back to December 1993.

[rae]

That's right, NL. MY tax dollars boosted incomes. It put an extra, what was it-- $10 in paychecks. And let's not forget the unemployment was extended for a few more months. Just neighbors helping neighbors, I guess. Won't you be my neighbor?

The only good thing about this recession is that people have been frightened into saving. Now, they don't have much, but they realize they need to put some away for a rainy day. Of course, that's not a good thing for those who rely on our disposable income for their business.

[Lesley]

Reminds me of the stimulus money Bush gave us as a large chunk of change. While it was fun to get a solid chunk of change, I don't think it did do much to help the economy. Many tucked the money away or paid off cc debts. At least (as discussed previousy), the extra $10-$17 per paycheck is so negligable it's generally being pumped back into the retail system. The cumulative effect is what counts. Averaging $13 x 26 pay periods x millions of employed people.

The only good thing about this recession is that people have been frightened into saving. Now, they don't have much, but they realize they need to put some away for a rainy day

totally agree with this one. I also am sort of seeing a lot of people (even those with jobs), delaying certain purchases or scaling back, reduce, reuse, repair, recycle. It's feels right!

[scraphappy]

Oh boy, I'm just so happy to work my A off and help the unemployed get more money. I'm sure the cap and trade will take care of the little extra money in my paycheck (which I haven't received yet) and then some.

It's not that I have anything against unemployment, just the people (some friends and family members included) who abuse it completely. When I was laid off, I was thankful for the unemployment to help until I found a new job. But, I see soooo many people stay on unemployment until it runs out and not even TRY to find a job. Again some friends and family members included.

A bit off topic, but how about overhauling the unemployment benefits. Lets get some checks and balancing going on there! Showing proof of applying for jobs and proof of not getting the job, before you get this weeks check. Sure you have to answers questions that you did try, but really......

[Lesley]

A bit off topic, but how about overhauling the unemployment benefits. Lets get some checks and balancing going on there! Showing proof of applying for jobs and proof of not getting the job, before you get this weeks check. Sure you have to answers questions that you did try, but really......

Can't disagree with you on this one. But while we're at it, I'd like to see a review, checks, and verification of many other entitlement programs...including day care paid by the State, health care paid by the state etc.

[sheryl]

Originally Posted by scraphappy

a bit off topic, but how about overhauling the unemployment benefits. Lets get some checks and balancing going on there! Showing proof of applying for jobs and proof of not getting the job, before you get this weeks check. Sure you have to answers questions that you did try, but really......

I totally agree!!!

[robine]

did not see jack **** e difference in DH's paycheck

not a penny more

so did some one *(*(* up, is this just some money crunching feelgood amen corner statement or what??

I too agree that there needs to be some checks and balances for checking to make sure Unemployement is not being used as FUN employment time as has been reported to have been occurring among some.