Source: Sharecast
On a year-on-year basis, headline PCE inflation reached 2.6%, while core inflation stood at a slightly firmer 2.8% clip, suggesting that inflation remains sticky despite the central bank's prolonged rate pause. Core PCE, which excludes volatile food and energy components, also rose 0.3% month-on-month.
Personal spending rose 0.3%, buoyed by expenditure on services and a modest uptick in goods purchases, while real spending, which adjusts for inflation, ticked up just 0.1%, reflecting more cautious US household behaviour.
Personal income also grew 0.3%, or $71.4bn, lifted by gains in government social benefits and compensation. However, real disposable income was unchanged, indicating households are seeing limited improvement in purchasing power. The personal saving rate was steady at 4.5%, with savings totalling $1.01trn.
The data comes ahead of the Federal Reserve's next policy meeting and could go a long way to reinforce expectations for a cautious stance on interest rates from the central bank.
Reporting by Iain Gilbert at Sharecast.com