Financial News: U.S. Consumer Prices Inch Up 0.1% In June,

U.S. Consumer Prices Inch Up 0.1% In June, In Line With Estimates

07/26/2024 - 09:27:00 (RTTNews)

(RTTNews) - Consumer prices in the U.S. crept up in line with economist estimates in the month of June, according to a highly anticipated report released by the Commerce Department on Friday.

The Commerce Department said its personal consumption expenditures (PCE) price index inched up by 0.1 percent in June after coming in unchanged in May. The uptick by the index matched expectations.

The report also said the annual rate of growth by the PCE price index slowed to 2.5 percent in June from 2.6 percent in May. The slowdown in year-over-year growth also met estimates.

Meanwhile, the Commerce Department said the core PCE price index, which excludes food and energy prices, rose by 0.2 percent in June after inching up by 0.1 percent in May. Economists had expected another 0.1 percent uptick.

The annual rate of growth by the core PCE price index was unchanged from the previous month at 2.6 percent in June, while economists had expected the pace of growth to slow to 2.5 percent.

"The subdued rise in prices will give the Federal Reserve greater confidence that inflation is on track to moderate toward its 2% target," said Michael Pearce, Deputy Chief U.S. Economist at Oxford Economics.

"While we are not expecting the news to be quite as good in coming months, we think it would take a nasty upward surprise to inflation between now and September to derail the Fed from cutting rates at that meeting."

The readings on inflation, which are said to be preferred by the Federal Reserve, were included in the Commerce Department's report on personal income and spending.

The report said personal income edged up by 0.2 percent in June after rising by a downwardly revised 0.4 percent in May.

Economists had expected personal income to climb by 0.4 percent compared to the 0.5 percent increase originally reported for the previous month.

Disposable personal income, or personal income less personal current taxes, also rose by 0.2 percent in June after climbing by 0.4 percent in May.

The Commerce Department also said personal spending increased by 0.3 percent in June after rising by an upwardly revised 0.4 percent in May.

Economists had expected personal spending to rise by 0.3 percent compared to the 0.2 percent uptick originally reported for the previous month.

Excluding price changes, personal spending edged up by 0.2 percent in May after climbing by 0.4 percent in May.

With spending rising by slightly more than income, personal saving as a percentage of disposable personal edged down to 3.4 percent in June from 3.5 percent in May.

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