April’s disposable income dropped as government payments fall

Disposable personal income fell to $18.8 trillion in April from March's $22.1 trillion, primarily driven by reduced government payments, particularly unemployment benefits and pandemic assistance. April saw spending edge up to $16 trillion from the prior month's $15.9 trillion.

Employee compensation, representing about 60% of personal income, has risen steadily each month for the last year. This includes increasing to $12.3 trillion in April from March's $12.2 trillion. This will need to continue increasing as government transfer payments recede, barring additional action. April's transfer payments were $4.8 trillion, down from $8.2 trillion in March. Other payments, which includes the special pandemic payments, were $1.4 trillion compared to $4.7 trillion. In April, unemployment compensation totaled $495.4 billion vs. March's $541.2 billion.