Looks like consumers are tapping into their savings. The 0.4 percent rise in spending was similar to the increase last month. The medium forecast by Bloomberg called for a 0.3 percent gain. Consumer spending accounts for 70 percent of the economy.
Incomes rose only 0.2 percent; the expected income was 0.3 percent.
The savings rate for June declined to 5.3 percent from 5.5 percent; the lowest numbers since March 2015.
“The Federal Reserve’s preferred measure of inflation remained contained. The price gauge based on the personal consumption expenditures index increased 0.1 percent from the prior month and was up 0.9 percent from a year earlier.” “The core price measure, which excludes food and fuel, increased 0.1 percent from May and was up 1.6 percent from June 2015. Inflation has not reached the Fed’s 2 percent goal since 2012” (Bloomberg report)
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