US core PCE prices surprise to the upside in May

(Sharecast News) - Personal income and spending growth in the States undershot economists' forecasts during the month of May, alongside a slightly stronger-than-expected reading on inflation.

According to the Department of Commerce, in seasonally adjusted terms personal incomes and spending fell by 0.4% and 0.1% month-on-month, respectively.

Consensus on the other hand had been for increases of 0.3% and 0.1%.

The headline price deflator for personal consumption expenditures was 0.1% higher over the month and ahead by 2.3% in annual terms, both as expected.

At the core level however, PCE prices - the Fed's preferred inflation gauge - were up by 0.2% versus May and 2.7% year-on-year (consensus: 2.6%).

Worth noting, the previous month's reading on core PCE prices had been revised up from a preliminary estimate of 2.5% to 2.6%.

Personal savings fell by four tenths of a percentage point in comparison to the prior month to reach 4.5%.

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