WASHINGTON — Nominal personal consumption expenditures rose 0.6% in April, a stronger gain that expected, while core PCE prices rose 0.2% to keep the year/year rate at 1.8% after a March revision, both factors that will weigh on the minds of analysts ahead of the June FOMC meeting, data released by the Bureau of Economic Analysis Thursday morning suggested.
The core price index's 1.8% year/year rise in April was unchanged from March after that month's year/year pace was revised down after rounding. Either way, it remains well above the 1.5% rate seen in the first two months of the year before a special factor in March 2017 rolled out of the calculation.
The 0.6% gain in current dollar PCE, well ahead of the 0.4% rise expected, followed an upward revised 0.5% gain in March. Spending on durable goods rose 0.3% in the month, while nondurable goods spending jumped 0.9% on a 1.5% gain in energy prices. Services spending was up 0.5%.
Real PCE was up only 0.4% in April, as the overall PCE price index was up 0.2% due to that gain in energy prices. The overall price index was up 2.0% year/year, the same as in March.
After inflation adjustment, durable goods PCE was up 0.3%, while real nondurable goods PCE was still up 0.4% and real services PCE was up 0.4%.
Through one month, second quarter real dollar PCE is up 2.7% at a seasonally adjusted annual rate from the first quarter compared with the 1.0% rise in real PCE in the first quarter GDP report released Wednesday, suggesting the soft consumption in the first quarter may have been short-lived.
Personal income growth was supported by a solid gain in wages and salaries, as well as smaller increases in the other income categories.
The saving rate fell to 2.8% in April from 3.0% in March, keeping the rate well below its 3.7% year-ago level. Some analysts have suggested that the relatively low level of savings has helped consumption, though much of the consumption gains seen over the last year seem to be financed rather than supported by cash.
Personal taxes fell by 0.5% in the month after a 0.3% gain in March. As a result, disposable personal income rose by 0.4%, while real disposable income was up 0.2%.
