Data: U.S. Bureau of Economic Analysis; Chart: Axios Visuals

Americans' personal income fell 4.2% last month, which was better than expected, but remained supported by increased government spending on unemployment benefits, food stamps and other generalized welfare payments that are all at never-before-imagined highs.

Why it matters: Personal spending ticked up, largely supported by one-time CARES Act direct payments, with personal income excluding government transfers up 1.5% from April.

  • However, disposable income fell 4.9%, suggesting that the U.S. household remains impaired despite millions being recalled to work.

By the numbers: Personal income was up 7.0% as of May, but wages and salaries were down 5.4% year over year, with government transfers still up 67.5% from their May 2019 level (but down from an increase of 90.1% in April).

  • Importantly, proprietor income rose 2.8% in May, month-over-month, after being down 12.7% in April, suggesting small businesses are starting to come back online.
  • Consumption was driven by a 28.4% increase in spending on durable goods, with new and used autos up 40.8%, and other durables up 24.5%.

What we're hearing: "The collapse in spending on discretionary services, mostly leisure, recreation, and food service, is the drag here," notes Ian Shepherdson, chief economist at Pantheon Macroeconomics.

  • "June spending will be much stronger, but we’re worried that July and August could see a relapse, led by a consumer retreat in the South and parts of the West, in the face of the surge in COVID infections."

The big picture: "It is clear that following the one-time bounce in spending observed this month, income and savings dynamics are moving in a direction that suggests that a general paradox of thrift has, for now, captured wealth households," Joe Brusuelas, chief economist at RSM, wrote in a note to clients.

Go deeper: Coronavirus lockdowns heighten income inequities of school-from-home

Go deeper

Updated 1 hour ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 12 p.m. ET: 12,772,755 — Total deaths: 566,036 — Total recoveries — 7,030,749Map.
  2. U.S.: Total confirmed cases as of 12 p.m. ET: 3,269,531 — Total deaths: 134,898 — Total recoveries: 995,576 — Total tested: 39,553,395Map.
  3. Politics: Trump wears face mask in public for first time.
  4. States: Florida smashes single-day record for new coronavirus cases with over 15,000.
  5. Public health: Trump's coronavirus testing czar says lockdowns in hotspots "should be on the table" — We're losing the war on the coronavirus.
  6. Education: Betsy DeVos says schools that don't reopen shouldn't get federal funds — Pelosi accuses Trump of "messing with the health of our children."
2 hours ago - Health

Florida smashes single-day record for new coronavirus cases

Data: Covid Tracking Project; Chart: Axios Visuals

Florida reported 15,299 confirmed coronavirus cases on Sunday — a new single-day record for any state, according to its health department.

The big picture: The figure shatters both Florida's previous record of 11,458 new cases and the single-state record of 11,694 set by California last week, according to AP. It also surpasses New York's daily peak of 11,571 new cases in April, and comes just a day after Disney World reopened in Orlando.

Pelosi: Trump is "messing with the health of our children" with push to open schools

House Speaker Nancy Pelosi said on CNN's "State of the Union" Sunday that Education Secretary Betsy DeVos' aggressive push to fully reopen schools this fall is "malfeasance and dereliction of duty," accusing the Trump administration of "messing with the health of our children."

Why it matters: Trump has demanded that schools reopen as part of his efforts to juice the economy by allowing parents to return to work, despite caution from health officials that little is known about how the virus impacts children.