The Personal Consumption Expenditures price index fell by 0.1% in June, marking its first decline in six years, the Commerce Department reported. This unexpected dip slowed annual headline PCE inflation to 3.7% from May’s 4.1%. Meanwhile, core PCE inflation, which excludes volatile food and energy prices, nudged up by 0.1% for the month and stands at 3.3% year-over-year.
Consumer spending increased by 0.3% in nominal terms and 0.4% after adjusting for inflation, driven mainly by a surge in services. Personal income and disposable income both rose by 0.2%, bolstered by gains in wages, investment returns, and government benefits. Despite the rise in spending, the personal saving rate ticked down to 2.7% in June.
