Investing.com – U.S. consumer spending increased as expected in June, though income disappointed with a flat reading, while core inflation unexpectedly increased, official data showed on Tuesday.
In a report, the Commerce Department said that personal spending increased 0.1% in June from the prior month. That was in line with consensus but slightly below the revised reading of 0.2% in May (initially a 0.1% gain).
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, unexpectedly registered a flat reading in June, compared to expectations for a 0.4% rise. That was after rising 0.3% a month earlier, revised down from the initial reading of a 0.4% advance.
Meanwhile, the core PCE price index rose 0.1% in June from a month earlier, in line with forecasts and the previous month’s reading.
The core PCE price index rose at an annualized rate of 1.5% in June, beating expectations for a gain of 1.3%. May’s rise was also increased to 1.5% from initial 1.4% increase.
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.
The report also showed that real personal consumption went unchanged in June, missing expectations for a gain of 0.1% and following an advance of 0.2% in May that was revised from an initial increase of 0.1%.
Following the report, EUR/USD was trading at 1.1812 from around 1.1809 ahead of the release of the data, GBP/USD was at 1.3212 compared to 1.3203 previously, while USD/JPY was at 110.49 from 110.54 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 92.84, compared to 92.86 ahead of the report.
Meanwhile, U.S. stock futures pointed to a higher open. The blue-chip Dow futures rose 93 points, or 0.43%, the S&P 500 futures gained 5 points, or 0.21%, while the tech-heavy Nasdaq 100 futures advanced 16 points, or 0.27%.
Elsewhere, in the commodities market, gold futures traded at $1,265.72 a troy ounce, compared to $1,264.19 ahead of the data, while crude oil traded at $49.86 a barrel from $49.76 earlier.