Customers at a New York supermarket, June 10, 2022 June Consumer Spending Growth Beat Economists' Expectations
Monthly inflation surged to the highest level since 2005 last month
In June, US consumer spending rose more than expected as Americans paid more for goods and services, and monthly inflation rose to its highest level since 2005.
Consumer spending, which accounts for more than two thirds of US economic activity rose 1.1% last month, the Commerce Department said Friday. The May data has been revised upwards to show spending rose 0.3% instead of the 0.2% previously reported.
Economists polled by Reuters had forecast consumer spending to rise 0.9%.
The data was included in the preliminary Q2 Gross Domestic Product report released Thursday. The report shows that inflation-adjusted consumer spending rose at the slowest pace in two years as purchases of goods, especially food, decreased due to rising prices.
Gross domestic product fell by 0 in the last quarter. 9% year-on-year after falling 1.6% in the first quarter.
Inflation picked up sharply in June. The Consumer Price Index (PCE) jumped 1.0% last month. This was the biggest increase since September 2005, after rising 0.6% in May. For 12 months, the index rose by 6.8%, which was the largest increase since January 1982. The PCE rose 6.3% year-on-year in May.
Excluding food and fuel prices, the index rose 0.6% after rising 0.3% in May. The so-called core PCE price index rose 4.8% year-on-year in June after rising 4.7% in May.