Consumer spending inches up in May
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.
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.