Personal consumption expenditures (PCE) increased $27.8 billion or 0.2 percent. Spending on non-durables (0.6 percent compared to 0.9 percent in April) and services (0.5 percent compared to 0.6 percent) rose at a softer pace while consumption of durables rebounded (0.1 percent compared to -0.2 percent).
Real PCE dropped less than 0.1 percent or $1.4 billion, reflecting a decrease in spending for services that was partially offset by an increase in spending for goods. Within goods, recreational goods and vehicles was the leading contributor to the increase. Within services, the largest contributor to the decrease was spending for household utilities.
Personal income advanced 0.4 percent or $60.0 billion, better than a downwardly revised 0.2 percent and in line with expectations. It primarily reflected gains in wages and salaries (0.3 percent compared to 0.3 percent in April), personal dividend income (1.5 percent compared to -0.2 percent) and non-farm proprietors’ income (0.5 percent compared to -0.1 percent).
Personal outlays rose $29.2 billion in May. Personal saving was $482.0 billion and the personal saving rate, personal saving as a percentage of disposable personal income, was 3.2 percent.
Disposable personal income (DPI) increased $63.2 billion or 0.4 percent.
The personal consumption expenditures (PCE) price index in the United States increased 0.2 percent month-over-month in May 2018, the same pace as in April and in line with market expectations. Goods inflation eased to 0.1 percent from 0.4 percent in the previous period, as prices of non-durable goods rose at a softer pace (0.3 percent vs 0.5 percent) while those of durable goods fell (-0.1 percent vs flat reading). Cost of services rose 0.2 percent, the same pace as in April. Excluding food and energy, PCE prices also went up 0.2 percent, the same as in the previous month and also in line with market forecasts. On the year, the PCE price index rose 2.3 percent, up from 2 percent in April. The core index rose 2 percent, hitting the Federal Reserve's 2 percent target for the first time in six years.