U.S. Personal Spending and Income Increase Firmly

Personal consumption expenditures rose 0.4% (5.1% y/y) during June after a 0.5% May increase, revised from 0.2%, and a 0.6% April gain, altered from 0.5%. A 0.4% increase had been expected in the Action Economics Forecast Survey.

Real personal spending increased 0.3% (2.8% y/y) for the second straight month. In constant dollars, durable goods spending rose 0.4% (6.6% y/y) after a 0.6% gain. A 0.7% decline (+3.1% y/y) in purchases of motor vehicles & parts followed little change in May. It was countered by a 1.2% rise (7.9% y/y) in spending on furniture & and appliances which came after a 1.0% increase. Recreational goods & vehicles purchases rose 0.4% (8.4% y/y) following a 1.0% jump. Real outlays on nondurable goods eased 0.1% (+2.6% y/y) after a 0.8% jump. Clothing & footwear purchases fell 0.6% (+2.9% y/y) after a 2.3% increase while gasoline & oil buying declined 0.6% (-1.9% y/y) following a 0.8% rise. constant dollar spending on food & beverages was off 0.3% (+3.5% y/y) following a 0.9% jump. Real services spending improved 0.4% (2.2% y/y) after a 0.1% uptick. Spending on recreation services increased 0.3% (0.0% y/y) in real terms after a 0.4% decline. Real housing & utilities outlays gained 0.4% (1.3% y/y) after a 0.7% fall. Real health care outlays improved 0.4% (3.3% y/y) for the second straight month. Outlays at restaurants & hotels strengthened 1.6% in constant dollars (3.8% y/y) after a 1.3% increase.

Personal income increased 0.4% (4.9% y/y) following a 0.4% May rise and a 0.3% gain in April. The May gain was unrevised but April's increase was revised from 0.2%. A 0.4% gain had been expected. Wages & salaries improved 0.4% (4.8% y/y) following a 0.3% rise. Proprietors income increased 0.5% (5.0% y/y) after a 0.7% gain and rental incomes improved 0.6% (4.9% y/y) following a 0.4% rise. Dividend payments surged 1.2% (3.7% y/y) for the second straight month, and earlier figures were revised sharply higher. Interest income gained 0.4% (9.4% y/y) and the revised gains also were strengthened significantly. Transfer receipts increased 0.3% (4.3% y/y) after a 0.1% rise. Social security payments improved 0.4% (5.1% y/y) after rising 0.2%. Medicare payments rose 0.6% (5.0% y/y) for the second consecutive month and Medicaid payments strengthened 0.3% (5.6% y/y) following four straight months of strong increase. Unemployment insurance payments gained 0.4% (-12.8% y/y) after declining for four straight months while veterans benefits fell 2.0% (+7.0% y/y) after a similar decline in May.

Disposable personal income increased 0.4% (5.4% y/y) for the second consecutive month. May's increase was unrevised. Real disposable income improved 0.3% (3.1% y/y) after a 0.2% rise.

The personal savings rate held steady at 6.8% for the second straight month, but upward revisions raised the rate significantly back through 2016. May's rate had been set at 3.2% when released last month.

The chain type price index inched 0.1% higher last month (2.2% y/y) after two straight 0.2% gains. The index excluding food & energy also rose 0.1% (1.9% y/y) following a 0.2% rise. Energy prices eased 0.1% (+13.1% y/y) after strong gains in the prior two months. Food prices rose 0.2% (0.6% y/y) and recouped May's decline.

The personal income & consumption figures are available in Haver's USECON database with detail in the USNA database. The Action Economics figure is in the AS1REPNA database.