The U.S. May personal income report was not strong despite a 1.4% surge in personal income; it confirms that gross domestic product is probably declining through the second quarter.

May personal income’s 1.4% gain was the largest since a May 2008 surge, and reflected $157.6 billion in extra transfers under the stimulus plan. The American Recovery and Reinvestment Act of 2009 reduced personal taxes and increased government outlays by making one-time $250 payments to retirees. The Commerce Department estimated without these changes, disposable personal income would have been up 0.2%, not the 1.6% gain that was reported.

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