Consumer spending inches up in May

June 26, 2014

Consumer spending increased 0.2 percent in May, less than the 0.4 percent expected, but up from completely flat numbers in April. Reuters reports the weak numbers are likely because of a decrease in health care spending.

personal-consumption

Here’s more detail:

In the 12 months through May, the personal consumption expenditures (PCE) price index was up 1.8 percent, the largest gain since October 2012. It had advanced 1.6 percent in April and should comfort Federal Reserve officials concerned about price pressures being too low.

Excluding food and energy, prices also posted a 0.2 percent gain. That followed a similar increase in April. The so-called core PCE price index increased 1.5 percent from a year ago. [Since mid-2012, the Fed has identified the core PCE deflator as its preferred inflation measure.]

That was the biggest increase since February last year and followed a 1.4 percent rise in April.

Both inflation measures still remain below the Fed’s 2 percent inflation target.

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
  • # Editors & Key Contributors