Tuesday, July 31, 2018

Personal Income increased 0.4% in June, Spending increased 0.4%

by Bill McBride on 7/31/2018 08:39:00 AM

The BEA released the Personal Income and Outlays report for June:

Personal income increased $71.7 billion (0.4 percent) in June according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $65.3 billion (0.4 percent) and personal consumption expenditures (PCE) increased $57.1 billion (0.4 percent).

Real PCE increased 0.3 percent. The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.1 percent.
The June PCE price index increased 2.2 percent year-over-year and the June PCE price index, excluding food and energy, increased 1.9 percent year-over-year.

The following graph shows real Personal Consumption Expenditures (PCE) through June 2018 (2012 dollars). Note that the y-axis doesn't start at zero to better show the change.

Personal Consumption Expenditures Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

The increase in personal income was at expectations, and the increase in PCE was close to expectations.

PCE growth was solid in Q2, and inflation is close to the Fed's target.