US Personal Income Growth Accelerates in April, Surges 0.8 Percent

By Andrew Moran

U.S. consumers earned more income, saved more money, and spent less in April, new U.S. government data show.

According to the Bureau of Economic Analysis, personal income rose by 0.8 percent, or $210.1 billion, to $25.858 trillion in April. This was up from the upwardly adjusted 0.7 percent jump in March.

Last month’s reading represented the largest month-over-month increase since May 2021 and far exceeded the consensus estimate of 0.3 percent.

The sizable jump was fueled by a 2.8 percent surge in personal current transfer receipts—money not tied to wages or active work, such as government social benefits—up from a 1.1 percent increase in the previous month.

Employee compensation rose by 0.5 percent, led by equal gains in private wages and salaries. In addition, the report revealed that wages and salaries in goods-producing industries declined by $3.1 billion, while wages and salaries in services-producing sectors soared by $53.1 billion.

Rental income remained flat, and personal income receipts from assets decreased by 0.4 percent.

Disposable personal income also swelled 0.8 percent, or $189.4 billion. The personal saving rate reached a one-year high of 4.9 percent.

At a White House event, President Donald Trump, alongside Elon Musk, called the data “rather extraordinary.”

The better-than-expected figures might only be temporary, says Yelena Shulyatyeva, a senior U.S. economist at The Conference Board.

“Personal income growth rose at a solid pace as the labor market remains healthy, but such strength may have been exaggerated by temporary factors,” Shulyatyeva said in a note.

The sharp jump likely reflected a one-off increase in Social Security benefits and higher compensation levels for trade and transportation workers, she said.

“We expect wages and salaries growth to slow as trade volumes subside,” Shulyatyeva added.

Consumers, meanwhile, curtailed their spending last month after front-running the president’s tariffs in March.

Personal spending edged up 0.2 percent, down from 0.7 percent in March. This was in line with market estimates.

Goods spending dipped by 0.1 percent. Conversely, spending on services climbed by 0.4 percent.

“Consumer spending came off the burner in April as the implementation of reciprocal tariffs weighed on consumer confidence and began to bring an end to the front-loading behavior we had seen in March,” said Andrew Foran, an economist at TD Economics, in a note.

Looking ahead, Foran estimates that consumer spending will grow 1.8 percent in the current quarter “as the economy continues to adapt to a higher cost environment.”

For an economy that is two-thirds consumption, improved personal spending could support more substantial growth this year. However, it may depend on how consumers perceive current or future economic conditions.

After months of a deteriorating outlook of the broader economy, sentiment improved in May.

The University of Michigan’s May Consumer Sentiment Index was adjusted higher to 52.2 from a preliminary estimate of 50.8. “Sentiment had ebbed at the preliminary reading for May but turned a corner in the latter half of the month following the temporary pause on some tariffs on China goods,” said Joanne Hsu, the university’s surveys of consumers director, in a statement.

Recent data also suggest that the U.S. economy could stage a rebound in the second quarter after contracting by 0.2 percent in the first three months of 2025.

The Federal Reserve Bank of Atlanta’s widely watched GDPNow Model suggests the GDP growth rate will be 3.8 percent during the April-June period, up from the previous estimate of 2.2 percent. The sizable adjustment occurred shortly after the immense decrease in the U.S. goods trade deficit.

In April, the goods trade gap declined by 46 percent to $87.62 billion, down from the record high of $162.25 billion posted in March. The Census Bureau reported that imports plummeted nearly 20 percent, which is good news for the GDP growth rate. Imports are subtracted from calculations because the gross domestic product measures the value of goods and services produced domestically.

“And it will only get better. The tariffs are so important,” Trump told reporters in the Oval Office.

The president announced, heading into the weekend, that he will double the tariffs on steel and aluminum imports to 50 percent, effective June 4.

The U.S.–China 90-day trade cease-fire is now under scrutiny after Trump said on social media that the Chinese regime “totally violated its agreement with us.”

“So much for being Mr. Nice Guy!” he wrote on Truth Social.

The president and other senior administration officials have not shared specifics of what the Chinese regime has failed to comply with in the mid-May deal.