It was an uneventful May with regards to income and spending, according to the latest data from the Bureau of Economic Analysis (BEA)
- Personal income fell 414 billion (2.0%) to 20.8 trillion
- Personal Consumption Expenditures was essentially flat increasing just 2.9 billion (0.1%) to 15.6 trillion.
The Personal savings rate fell to 12.4%, down from 14.5% in April and down from the high this year seen in March at 27.6%.
The worrying news was the PCE, better known as the Federal Reserves favorite inflation gauge…
- The core PCE Price Index jumped 0.5% from April and was up 3.4% for the year. This was the highest reading since 1991.
- The headline PCE index was up 0.4% month-over-month and 3.9% year-over-year. This was the highest reading since 2001.
To end on a positive note. The decrease in personal income in May primarily reflected a decrease in government social benefits, not a decrease in the private sector.