WASHINGTON - Personal consumption increased 0.2% in May and income rose 0.4% as core consumption increased by the largest amount in seven months, the Commerce Department reported today.
Core PCE, which excludes food and energy costs, increased 0.2% for the month, the largest core increase since October. Core expenditures for the year ending in May increased 1.3%.
The personal savings rate, which is disposable personal income minus consumption, was $454.3 billion in May, the highest level since September. April’s personal savings rate was $427.2 billion.
Economists expected personal and core personal consumption expenditures to each rise 0.1%, according to the median estimate from Thomson Reuters. Economists estimated incomes would rise 0.5%.
Personal consumption was flat in April, unrevised from the initial estimate last month.
Incomes in April increased 0.5%, revised higher from a 0.4% gain, the largest monthly increase in a year. Temporary and intermittent workers hired for the 2010 Census boosted government wages and salaries by $5.7 billion in May. Total government wages and salaries increased $6.6 billion.
Disposable personal income, excluding taxes, increased 0.4% compared with a 0.6% increase in April.
The Commerce Department on Friday reported with gross domestic product figures that core PCE increased 0.7% in the first quarter, the smallest increase on record dating back to 1959.
