Personal income inched up a modest 0.3 percent in May, but American workers appeared to play it safe by saving more money and holding back on spending, the Commerce Department said yesterday.
''We read this as being weak,'' said Jerry Jordan, chief economist at First Interstate Bancorp in Los Angeles.
According to figures released by the department's Bureau of Economic Analysis, personal savings rose to 6.2 percent last month from 6 percent in April. Savings hit a nearly five-year high of 6.3 percent in March.
Personal consumption was unchanged in May following seven months of increases, a government spokesman said. Discounting inflation, consumption was off by about 0.3 percent.
Last month's 0.3 percent increase in personal income generally was in line with estimates by private forecasters.
The $14 billion gain in income followed increases of 0.3 percent in April and 0.8 percent in March, the report said. The Commerce Department said the April and May advances in personal income were offset by smaller subsidy payments to farmers. Excluding these payments, personal income was up 0.4 percent in May and 0.5 percent in April.
Workers' wages and salaries increased $10.3 billion in May compared with an increase of $16.4 billion in April, with the manufacturing and commodity producing sectors of the economy reporting higher pay.