Ahead of the Bell: Income and Spending

Personal income, which consists of wages and salaries, is expected to have risen by 0.4 percent, or $48.4 billion, over April levels, according to the consensus estimate of Wall Street economists surveyed by Thomson/IFR. Estimates range from a gain of 0.2 percent to 1.9 percent.

Personal consumption, or spending on goods and services, is expected to have risen by 0.7 percent, or $70.7 billion, over April levels, according to economists.

Personal income and personal spending levels both rose 0.2 percent in April. The Commerce Department will release the May data at 8:30 a.m. EDT.

But analysts expect bigger gains for May as economic stimulus payments hit taxpayer mailboxes. The checks are the centerpiece of a $168 billion stimulus package that Congress passed at the urging of President Bush in February to help jump-start the stalled economy.

Government data released earlier this month suggest the checks are working. The Commerce Department reported that retail sales climbed 1 percent in May, double what had been expected. The retail sales report showed that general merchandise stores, which include department stores and discounters such as Wal-Mart, saw sales rise by 1.2 percent, the best showing since March 2007.

Wal-Mart's same-store sales, or sales at stores open at least a year, rose a stronger-than-expected 3.9 percent in May. Elsewhere, Bed Bath & Beyond Inc. this week reported better-than-expected results for the first quarter.

Wall Street pays close attention to consumer spending because it represents about 70 percent of U.S. gross domestic product, which measures the value of final goods and services produced.

The Commerce Department said Thursday that the economy as measured by GDP rose at 1 percent annual rate in the first quarter, a slight improvement from the previous estimate of 0.9 percent, but still quite anemic.