Federal Reserve's Preferred Inflation Measure Stays Flat In May

Zinger Key Points
  • Although unemployment filings ticked down from the prior week, the number still came in slightly above economist expectations.
  • There's a decrease in spending on vehicles and parts, but an increase in gasoline and other energy goods.

The second quarter is set to come to a close Thursday and the S&P 500 is on pace to close out its worst first half of the year since 1970.

What To Know: Stock index futures are signaling a lower open after the Personal Income and Outlays report showed inflation measured by the personal consumption price (PCE) index remained unchanged in May at 6.3% year-over-year. This number was inflated by a 35.8% increase in energy prices and an 11% increase in food prices. Excluding food and energy, the PCE price index for May increased 4.7% from a year ago.

The PCE price index is the Federal Reserve's preferred measure of rising prices. It's released on a monthly basis and shows changes in the prices of goods and services purchased by consumers in the U.S.

According to Bureau of Economic Analysis data, personal consumption expenditures increased by $32.7 billion or 0.2% in May. Personal income increased $113.4 billion or 0.5% last month and disposable personal income jumped $96.5 billion or 0.5%.

The increase in personal income primarily reflects increases in compensation and proprietors' income, which were partially offset by a decrease in government social benefits. 

The $32.7 billion increase in PCE reflects an increase of $76.2 billion in spending for services that was partially offset by a decrease of $43.5 billion in spending for goods. Increases in housing and utilities and health care were the largest contributors within services. Within goods, a decrease in spending on vehicles and parts was partially offset by an increase in gasoline and other energy goods.

See Also: Benzinga Before The Bell - Texas Giga Tesla's Output Ramp Up, California's Lithium Tax, Spot Bitcoin ETF Proposal Rejection And Other Top Financial Stories Thursday, June 30

Jobless Claims: For the week ending June 25, the advance figure for seasonally adjusted initial claims was 231,000, representing a decrease of 2,000 from the previous week. Although unemployment filings ticked down from the prior week, the number still came in slightly above economist expectations around 230,000, according to Bloomberg.

SPY Price Action: The SPDR S&P 500 SPY was down 1.15% at $375.89 at press time, according to data from Benzinga Pro.

Photo: Andrew Crump from Flickr.

Posted In: BloombergBureau of Economic Analysis DataGovernmentNewsEcon #sFederal Reserve

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.