Personal income rose $61.8 billion in June but consumers held on to it as personal spending fell 1.3 billion in the month, the ""Labor Department"":http://www.dol.gov/ reported Tuesday.[IMAGE]
The increase in income ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô 0.5 percent ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô topped expectations of a 0.4 percent boost, but the 0.01 percent decline in spending fell short of the 0.1 percent increase economists had expected.
The numbers were consistent with last week's report of tepid Gross Domestic Product growth for the second quarter.
Disposable personal income ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô essentially after-tax income ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô rose $52.4 billion in June.
Personal savings as a percentage of disposable (after tax) income rose to 4.4 percent in June from 4.0 percent in May.[COLUMN_BREAK]
With continuing low interest rates, personal interest payments (non-mortgage interest) fell to $169.3 billion in June from $173.0 billion in May.
Wages and salaries accounted for more than half the increase in income, improving $32.6 billion in June after increasing just 8.9 billion in May
Unemployment insurance payments fell 4.7 billion in May, the sixth straight month-over-month decline ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô reflecting congressional mandated reductions.
The drop personal consumption came primarily in spending on non-durable goods which dropped $14.6 billion while spending on durable goods ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô often a sign of consumer confidence ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô fell $1.3 billion.
Spending on services rose $14.6 billion. The month-over-month decline in spending on goods was the third straight
The Personal Consumption Expenditure (PCE) Price Index ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô often considered the Federal Reserve's favored measure of inflation ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô rose 0.1 percent in June but remained at 1.5 percent above its year-ago level.
In April, the Index the year-over-year increase was 1.9 percent.
Meanwhile, the Core PCE Index ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô excluding food and energy - rose 0.2 percent in June and was up 1.8 percent in the last year, compared with a 0.1 percent increase in May producing a 1.8 percent year-over-year increase.
The core inflation rate in April was 1.9 percent.