WASHINGTON — The following are the key points from the May personal income, spending, and price data released Friday by the Bureau of Economic Analysis:
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- The data suggest inflation is not retreating, with the year/year rate for the core measure jumping up to 2.0% and the PCE price index rising to 2.3%. This data could cause inflation hawks to be concerned, however inflation was expected to rise.
- The core PCE price index +0.2% m/m (+0.21257% unrounded), as expected, after a +0.2% gain (+0.17192%) in April. The y/y rate jumped to 2.0% following a 1.8% gain in April. The overall PCE price index was up 0.2% m/m after a 0.2% April reading as energy prices rose by 0.9% in the current month, while food prices were down 0.2%. The PCE price index y/y rate rose to 2.3% in May.
- The savings rate surprisingly jumped to 3.2% from 3.0% in April. This still remains below the May 2017 level of 3.8%, suggesting consumers continue to prioritize spending over savings.
- Current dollar PCE was up 0.2%, smaller than the 0.4% gain expected. Real PCE was flat following a 0.3% gain in April, and was up 2.3% SAAR through two months of the second quarter. May PCE was lifted by mild gains in both goods and services spending, but real PCE had a solid gain in goods spending, but a decline in services spending.
- Personal income was up 0.4%, right on target with analysts' expectations, led by a 0.3% rise in wages and salaries, as well as a large 0.7% gain in personal income receipts on assets, as well as smaller gains in other income categories. Personal taxes declined by 0.2 after a 0.4% decline in April. Disposable personal income posted a 0.4% rise. Real disposable income rose 0.2%.
