The US consumer price data rose 0.2% in June compared to May, when it had climbed 0.1%. This is a key data point for interest rate policy.
He Department of Commerce The US reported that the spending index of consumer price (PCE) underlyingwhich excludes food and energy, rose 0.2% on the month in June, compared with a 0.1% increase in May. A Reuters poll had forecast a 0.1% increase for June. On a year-on-year basis, the index Core PCE remained at 2.6%, the same as in Maywhile a slight decrease to 2.5% was expected.
Consumer spending, which accounts for more than two-thirds of economic activity, rose 0.3% in June, with the May figure revised up to 0.4% from 0.2%. The personal income rate also rose 0.2%, though the May figure was revised down to 0.4% from 0.5%. A 0.4% increase was expected for June. It is the Federal Reserve’s favorite indicator.
The detail of the data
Inflation-adjusted spending on services and goods each rose 0.2%. The largest increases in services were seen in housing and utilities, while vehicles and recreational items boosted spending on goods.
The slowdown in the labor market has begun to affect purchasing power, with wages and salaries rising 0.3% in June, half the pace of the previous month. Inflation-adjusted disposable income growth slowed to 0.1%. The savings rate fell to 3.4%, the lowest level since December 2022. Additional data due out next week, including the monthly employment report, will provide a clearer view of income growth.
Source: Ambito
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