Monday, June 27, 2011

Consumer spending hits a bump in the road

The government reported this morning that consumer spending was unchanged in May, highlighting the slowdown in job growth and the uncertainty in consumer sentiment.

Personal income managed to rise 0.3% and the savings rate increased a tick to 5.0%.

Removing the impact of inflation, real consumer spending actually declined by 0.1%, the same as April. 

Moving over to inflation, the PCE Price Index was up 0.2% last month, but the core rate, which excludes food and energy, rose by 0.3%, signaling that the steep jump in commodity prices is slowly beginning to leak into goods and services.

Summarizing the data-heavy, number’s-heavy report simply confirms what we’ve already known – growth has slowed but has not stalled.

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