Household spending picked up more than expected in June and prices continued to climb.
Personal consumption expenditures rose by one percent last month, more than the six-tenths of a point forecast by economists. Adjusted for inflation, the spending increase was half of that.
Spending on goods climbed 0.5 percent after falling 2.1 percent in May. Durable goods spending fell 1.5 percent and spending on nondurables rose 1.8 percent. Spending on services rose 2.1 percent, the four consecutive monthly increase.
Income ticked up one-tenth of a percentage point, much better than the seven-tenths decline expected or the downwardly revised 2.2 percent decline in May. Incomes have been volatile as three rounds of large stimulus deposits have hit bank accounts.
Personal income fell 7.2 percent in February, rose 21 percent in March, and dropped 13.2 percent in April
The personal consumption expenditures price index, which the Federal Reserve uses for its inflation target, rose 0.5 percent for a second month, slightly less than expected. Compared with a year ago, the PCE index is up 4 percent. Core PCE, which excludes food and energy, rose 0.4 percent on a monthly basis and 3.5 percent annually.
Disposable income, which is income after taxes, was flat for the month and down five-tenths of a point on an inflation-adjusted basis.
The personal saving rate—which measures unspent disposable income—was 9.4 percent.
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