WASHINGTON – Personal income rose 0.4% in May, while nominal PCE was up 0.1%, and the core PCE price index posted another modest 0.1%, data released by the Commerce Department Friday morning showed.
The gain in personal income was stronger than the 0.3% gain expected, but the readings for nominal PCE and the core price index were right on analyst expectations in an MNI survey.
The core PCE price index's 1.4% year/year rise was down from 1.5% in April and still stands at its lowest point since 1.4% in December 2015. The last time the year/year rate was lower was in October 2015, when it was 1.3%.
The overall PCE price index was down 0.1% in May, as energy prices posted a 3.0% decrease. The year/year rate for overall prices fell to 1.4% from 1.7% in April.
The 0.1% gain in current dollar PCE reflected a strong 0.3% rise in services that more than offset a 0.5% decline in total goods spending. Durable goods PCE fell 0.3%, while nondurable goods spending fell 0.5%.
Real PCE also rose 0.1% in May, with real spending on durable goods down only 0.1% after inflation adjustment. Nondurables spending rose 0.2% and services spending was rose 0.1%.
Second quarter real PCE growth was up 2.6% at a seasonally adjusted annual rate from the first quarter, compared with the first quarter's 1.1% real PCE increase reported with Thursday's GDP data.
Wages and salaries rose only 0.1% as payrolls growth was slower, but the other income components were generally higher, especially dividend income.
Disposable personal income posted a 0.5% gain in the month, while real disposable income was up 0.6%.
