Americans' personal incomes showed almost no gain in May, while consumers cut back on their spending and began saving for brighter economic times, the Commerce Department said Tuesday. Personal income increased only $3.1 billion last month, to a seasonally adjusted $2.07 trillion, a negligible 0.1 percent increase.
At the same time, the department revised its original numbers for April, the month the current recession took its hardest shot at the economy. It now says personal income actually fell 0.1 percent in April, instead of growing by 0.02 percent as previously reported. It represented the first time personal income had fallen since July 1975, when the nation was in its last recession.
The growth in income was held to almost nothing because layoffs, particularly in the manufacturing sector, cut overall wages and salaries for Americans by $1. 1 billion. On the spending side, personal consumption expenditures, a general measure of consumer spending, were off 0.2 percent, or $2.4 billion, in May.