The Commerce Department reported on Thursday that consumer spending in
the U.S. went up 0.2 percent m-o-m in May after a downwardly revised 0.6
percent m-o-m gain (from 0.9 percent m-o-m) in April. This represented the weakest
monthly rise in consumer spending so far this year. Economists had forecast the
reading to increase 0.4 percent m-o-m.
Meanwhile, consumer income jumped 0.5 percent m-o-m in May, following an
upwardly revised 0.5 percent m-o-m increase (from 0.4 percent m-o-m) in the previous
month. Economists had projected a 0.5 percent
m-o-m gain.
The May advance in personal income was mainly driven by gains in
compensation and proprietors' income, which, however, were partly offset by a decline
in 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, increased 0.3 percent m-o-m in May, the
same pace as in April. Economists
had expected the index would climb 0.4 percent m-o-m.
In the 12 months through May, the core PCE rose 4.7 percent, slowing from an unrevised 4.9 percent in the
12 months through April. This was the lowest
rate since November 2021 (4.7 percent). Economists had forecast a gain of 4.8 percent
y-o-y.