US personal income, spending rise in June to beat estimates

US personal income, spending rise in June to beat estimates

Core PCE price index, Fed's preferred inflation indicator, up 3.5% year-on-year

By Ovunc Kutlu

ANKARA (AA) - Personal income and spending in the US rose last month to beat market estimates, according to Department of Commerce on Friday.

In June, personal income increased $26.1 billion, or 0.1%, from the previous month, while personal spending jumped $155.4 billion, or 1%.

Market expectation for personal income was a decline of 0.3% in June, while it plummeted 2.2% in May. Estimate for personal spending was an increase of 0.7% last month, while it fell 0.1% in May.

The personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation indicator, increased 0.5% in June. Core PCE index, excluding food and energy, rose 0.4% from the previous month. Year-on-year, they were up 4% and 3.5%, respectively.

The Fed has repeatedly said in recent months it will allow inflation to climb slightly above its 2% target to revive American economy from the pandemic until raising interest rates, but inflation has soared recently.

The Producer Price Index (PPI), which measures the change in the prices of goods sold by manufacturers, soared 7.3% in June, from the same month last year, which was the largest 12-month increase since November 2010.

The Consumer Price Index (CPI) that measures changes in the price of goods and services from a consumer perspective, jumped 5.4% in June year-over-year -- the largest 12-month increase since August 2008.

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