Consumption in June declined for the first time in nearly two years as incomes rose by the smallest amount in seven months, the Commerce Department reported Tuesday.
The consumption and income figures for June underscored the weakness in spending revealed last Friday in the advance gross-domestic product report. June consumption declined 0.2%, the first drop since September 2009. Core personal consumption expenditures, excluding food and energy spending, rose 1.3% for the year ending in June.
Consumption of energy goods and services showed a sharp reversal from trends earlier this year. Energy prices jumped in the first quarter amid political upheaval in the Middle East. In June, energy consumption expenditures fell 4.5%, following a 1.2% decline in May.
Personal incomes edged up in June and disposable personal income increased 0.1%. The personal savings rate increased to $620.6 billion in June, the highest level in 10 months.
Economists expected consumption would increase 0.2% in June and core PCE would gain 0.2%, according to the median estimate from Thomson Reuters. Economists also estimated incomes would rise 0.2% for the month.
