Investing.com - U.S. personal spending rose more than expected in May, boosting optimism over the health of the economy and supporting the case for a U.S. interest rate hike this year, official data showed on Thursday.
In a report, the Commerce Department said that personal spending rose by a seasonally adjusted 0.9% in May, the biggest gain since August 2009 and above expectations for a gain of 0.7%. Personal spending rose 0.1% in April, whose figure was revised up from a previously reported flat reading.
Consumer spending is the single biggest source of U.S. economic growth, accounting for as much as two-thirds of economic activity.
The report also showed personal income rose by a seasonally adjusted 0.5% in May, in line with forecasts and after rising 0.5% in April.
Meanwhile, the core PCE price index inched up 0.1% in May, meeting expectations and after rising 0.1% in April. The core PCE price index rose at an annualized rate of 1.2%, matching estimates and down from a 1.3% gain in April.
The Federal Reserve uses core PCE as a tool to help determine whether to raise or lower interest rates, with the aim of keeping inflation at a rate of 2% or below.
EUR/USD was trading at 1.1196 from around 1.1211 ahead of the release of the data, GBP/USD was at 1.5723 from 1.5738 earlier, while USD/JPY was at 123.72 from 123.60 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 95.50, compared to 95.37 ahead of the report.
Meanwhile, U.S. stock futures pointed to a modestly higher open. The Dow futures pointed to a gain of 0.35%, the S&P 500 futures tacked on 0.3%, while the Nasdaq 100 futures advanced 0.35%.
Elsewhere, in the commodities market, gold futures traded at $1,172.80 a troy ounce, compared to $1,173.20 ahead of the data, while crude oil traded at $59.87 a barrel from $59.88 earlier.
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U.S. personal spending jumps 0.9% in May, income rises 0.5%
Published 06/25/2015, 08:37 AM
Updated 06/25/2015, 08:37 AM
U.S. personal spending jumps 0.9% in May, income rises 0.5%
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