Investing.com –U.S. consumer spending rose more than forecast while the annual increase in core PCE prices remained stable as expected in June, official data showed on Tuesday.
In a report, the Commerce Department said that personal spending increased by a seasonally adjusted 0.4% last month, beating expectations for a 0.3% rise, and compared to a gain of 0.4% in May.
Consumer spending is the single biggest source of U.S. economic growth, accounting for as much as two-thirds of economic activity.
Personal income, meanwhile, rose by a seasonally adjusted 0.2%, below forecasts for a 0.3% gain and after rising 0.2% a month earlier.
Meanwhile, the core PCE price index inched up 0.1% last month, matching expectations and compared to May’s 0.2% increase.
The core PCE price index rose at an annualized rate of 1.6%, in line with forecasts and a repeat of May’s gain. The number has held steady at 1.6% since March.
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.
Immediately following the report, EUR/USD was trading at 1.1194 from around 1.1203 ahead of the release of the data, GBP/USD was at 1.3273 from 1.3283 earlier, while USD/JPY was at 101.59 from 101.55 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 95.32, compared to 95.26 ahead of the report.
Meanwhile, U.S. stock futures pointed to a lower open. The blue-chip Dow futures lost 19 points, or 0.10%, the S&P 500 futures shed 4 points, or 0.17%, while the tech-heavy Nasdaq 100 futures fell 6 points, or 0.12%.
Elsewhere, in the commodities market, gold futures traded at $1,367.65 a troy ounce, compared to $1,367.15 ahead of the data, while crude oil traded at $40.48 a barrel from $40.58 earlier.