**MNI 5 THINGS:US Core PCE Price Index +0.1%; Y/Y Still +1.9%>

--5 Things We Learned From June Personal Income Data         

By Kevin Kastner, Harrison Clarke, and Shikha Dave

     WASHINGTON (MNI) - The following are the key points from the June 

personal income, spending, and price data released Tuesday by the 

Bureau of Economic Analysis: 

     - The data suggest inflation is steady, with the year/year 

rate for the core measure staying at +1.9% and the PCE price index 

at +2.2% y/y. The FOMC is likely to take note of this at their two day 

meeting starting today, but it should not deter them from their gradual 

path of rate increases.

     - The core PCE price index +0.1% m/m (+0.108% unrounded) as 

expected, after a +0.2% gain (+0.195%) in May. The y/y rate stayed at 

+1.9% for the third straight month after hitting +2.0% in March after 

annual revisions. The overall PCE price index was +0.1% m/m after +0.2% 

in May as energy prices fell by 0.1% in the current month, while food 

prices were up 0.2%. The PCE price index y/y rate stayed at +2.2% in 

June. 

     - The savings rate stayed at 6.8%, with the higher levels than 

previously reported due to the benchmark revisions reported Friday. 

     - Current dollar PCE was up 0.4%, lower than the 0.5% gain 

expected. Real PCE was up 0.3%, the same as in May. June PCE reflects 

a flat reading in goods and a small gain in services spending, with 

the same mix for real PCE. 

     - Personal income was up 0.4% as expected, led by a 0.4% gain in 

wages and salaries. There were also income gains for all other 

categories. Personal taxes rose by 0.3% after a 0.2% gain in May. 

Disposable personal income posted a 0.4% gain. Real disposable income 

rose 0.3%. 

     ** MNI Washington Bureau: 202-371-2121 ** 

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