Personal consumption expenditures climbed 0.4% after gaining 0.3% in March, the fastest pace since December 2016, according to the most recent data release from the Bureau of Economic Analysis. Personal income was up by 0.4% in March after a 0.3% increase in February. The solid gain in personal income was largely driven by increases in wages and salaries that rose by 0.7% in April.
Disposable personal income, income remaining after deducting personal income taxes, grew by 0.2% after accounting for inflation. Meanwhile, the savings rate stayed at 5.3%. The savings rate declined through the second half of 2016, but was on an upward trend from the beginning of 2017. The savings rate rose with the onset of the Great Recession as households repaired their balance sheets. However, this process of deleveraging held back GDP growth due to reduced consumption.