The Commerce
Department reported on Friday that consumer spending in the U.S. increased 0.2
per cent m-o-m in May after a downwardly revised 0.1 per cent m-o-m uptick (from +0.2 per cent m-o-m)
in April. Economists had forecast a gain of 0.3 per cent m-o-m for May.
Meanwhile,
consumer income jumped 0.5 per cent m-o-m in May, following an unrevised 0.3 per cent m-o-m rise in the previous month. Economists had foreseen a 0.4
per cent m-o-m climb.
The May increase
in personal income was mainly due to gains in compensation, personal income
receipts on assets, and government social benefits.
Elsewhere, the
personal consumption expenditures (PCE) price index, excluding the volatile
categories of food and energy, which is the Federal Reserve's preferred
inflation gauge, inched up 0.1 per cent m-o-m in May, following an upwardly revised 0.3 per cent
m-o-m increase (from +0.2 per cent m-o-m) in April. This marked the weakest
monthly advance in the core PCE price since November 2023 (+0.1 per cent
m-o-m). Economists had predicted the indicator would edge up 0.1 per cent
m-o-m.
In the 12
months through May, the core PCE price index surged 2.6 per cent, decelerating from an unrevised
2.8 per cent in the 12 months through April. This was the smallest reading since March 2021 (+2.3 per
cent). Economists
had expected a soar of 2.6 per cent y-o-y.