Briefing.com: Personal Income and Spending

Updated: 26-Jul-24 09:22 ET

June Personal Income and Spending

Updated: 26-Jul-24 09:22 ET

Highlights

Personal income increased 0.2% month-over-month in June (Briefing.com consensus 0.4%) following a downwardly revised 0.4% increase (from 0.5%) in May.
Personal spending increased 0.3% month-over-month (Briefing.com consensus 0.3%) following an upwardly revised 0.4% increase (from 0.2%) in May.
The PCE Price Index was up 0.1% month-over-month and the core-PCE Price Index, which excludes food and energy, was up 0.2%. Both were in-line with expectations. Those increases left the PCE Price Index up 2.5% year-over-year, versus 2.6% in May, and the core-PCE Price Index up 2.6% year-over-year, unchanged from May.

Key Factors

The PCE Price Index for Goods was down 0.2% year-over-year, versus down 0.1% in May. The PCE Price Index for Services was up 3.9% versus 4.0% in May.
The personal savings rate as a percentage of disposable personal income dipped to 3.4% from 3.5%.
Wages and salaries increased 0.3% month-over-month following a 0.6% increase in May.
Rental income decreased 0.7% month-over-month for the third straight month.
Personal interest income jumped 0.3% month-over-month for the third straight month.
Personal dividend was flat month-over-month following a 0.5% increase in May.
Real disposable income was up 0.1% month-over-month and was up 1.0% year-over-year. Real personal spending was up 0.2% month-over-month and was up 2.6% year-over-year.

Big Picture

The key takeaway from the report is that the price indexes didn't worsen on a year-over-year basis (i.e., move higher relative to the prior month). Consequently, they didn't give the market any reason to think the Fed will not cut rates at its September FOMC meeting considering comments from Fed officials, who knew where the May PCE price readings stood, have been teeing up that possibility.