US consumer spending rises in June as inflation takes bigger bite

by | Jul 29, 2022 | World

US consumer spending barely rose in June after falling in the prior month, underscoring how decades-high inflation has eroded Americans’ paychecks and tempered demand.Purchases of goods and services, adjusted for changes in prices, increased 0.1% in June after a revised 0.3% drop a month earlier, Commerce Department data showed Friday. Spending on services and merchandise both crept higher.
The personal consumption expenditures price index, which the Federal Reserve uses for its inflation target, rose 1% from a month earlier and was up 6.8% since June 2021. The annual advance was the biggest in 40 years.

Excluding food and energy, the price index increased a larger-than-forecast 0.6%. That was the biggest gain in more than a year. The core measure was up 4.8% from a year ago, a slight acceleration from the previous month.
Stock futures moved higher after briefly paring gains on inflation concerns. Treasury yields were also up slightly along with the dollar.
The figures come just a day after separate data showed the economy shrank in back-to-back quarters and underscore how spending power has deteriorated in the face of surging prices. Americans’ incomes, while growing, are still not keeping pace with rapid price increases, and that’s left many consumers with little — if any — leftover …

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