Social Security payment timings distorted income in May.
Personal Current Transfer Receipts
Personal Current Transfer Receipts (PCTR) are government payments for which no current services are rendered.
Examples include Medicare, Medicaid, housing assistance, SNAP (food stamps) unemployment insurance, and veteran’s benefits.
Social Security Reported Decline
The BEA reported Social Security declined $122 billion annualized in May. That’s a decline of 7.27 percent. But that didn’t happen.
In my previous post, I explained …
Social Security payments were not down in May; they were simply distributed later in the month than usual due to the Social Security Administration (SSA)’s payment schedule. Specifically, the second Wednesday of May, which is the payment date for those with birthdays between the 1st and 10th, fell on May 14th, making it the latest possible date for the first round of payments in any month.
The above snip is AI-Generated. It appears the BEA did not capture all Social Security income.
This is confirmed by other numbers.
Personal Income in Billions of US Dollars
Month-Over-Month Personal Income
- Personal Income: -0.43 percent
- Disposable Personal Income: -0.55 percent
- Personal Income Minus PCTR: +0.28 percent
Disposable means after taxes.
However, it’s real personal income that drives GDP.
Real Personal Income Billions
Month-Over-Month Real Personal Income
- Real Personal Income: -0.56 percent
- Real Disposable Personal Income: -0.69 percent
- Real Personal Income Minus PCTR: -0.13 percent
Those are poor numbers but not as bad as the touted headline numbers.
The NBER, the official arbiter of recessions, uses Real Personal Income Minus PCTR in its determinations.
PCE Price Index
The BEA says the month-over-month PCE price index rose 0.1 percent.
Carried to three decimal places, I calculate PCE Price Index M/M as 0.135 percent.
Rounding cause the BEA to over-report M/M income and spending, and understate inflation.
Personal Income and Spending Unexpectedly Decline in May
For more discussion please see Personal Income and Spending Unexpectedly Decline in May
Economists missed the boat by a mile on income and expenditures.
Related Posts
June 26, 2025: Trade Deficit Increases as Imports Decline 0.75% and Exports Decline 5.9%
Welcome to another nasty set of trade data numbers.
June 26, 2025: Unexpected Huge Negative Revisions to First-Quarter GDP and What it Means
The BEA revised GDP lower by 0.3 percentage points. The details are worse.