**MNI 5 THINGS:US Core PCE Price Index +0.2%; Y/Y Now +2.0%>

--5 Things We Learned From July Personal Income Data         

By Kevin Kastner, Harrison Clarke, and Shikha Dave

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

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

Bureau of Economic Analysis: 

     - The data suggest inflation is picking up further, with the 

year/year rate for the core measure rising to +2.0% and the overall PCE 

price index moving up to +2.3% y/y. Personal income and PCE growth were 

both dead on expectations, as was the 0.2% monthly gain for core PCE 

prices, so markets are likely to wave off the data. 

     - The core PCE price index +0.2% m/m (+0.156% unrounded), as 

expected, after +0.1% (+0.121%) in June. The y/y rate rose to +2.0% from 

+1.9% in June, while the May year/year rate was revised up to +2.0%, 

making the uptick to the Fed's target in July less of a story. The 

overall PCE price index was +0.1% m/m after +0.1% in June despite a 0.5% 

decline in energy prices. The PCE price index y/y rate rose to +2.3% 

from +2.1%, its highest point since March 2012, when it was +2.4%. 

     - Current dollar PCE was +0.4%, as expected. Real PCE was +0.2% 

after a +0.3% in June. July PCE reflects a small 0.2% gain in goods 

spending (with durables down and nondurables up) and a 0.4% rise in 

services spending. An MNI calculation shows that real PCE in July was 

+2.1% SAAR from the second quarter average, and was +3.1% after an 

adjustment for only having one month of data, both indicating a slowdown 

from the 3.8% PCE pace in the second quarter reported on Wednesday. 

     - Personal income was +0.3%, as expected, led by a 0.4% 

gain in wages and salaries. There were also income gains for rental 

income, income of assets, and transfer receipts, offset by a decline in 

proprietors' income. Personal taxes were +0.1% after a +0.3% in June. 

Disposable personal income was +0.3% while real disposable income +0.2%. 

     - The savings rate slipped to 6.7% from 6.8% in June, its lowest 

point since December. 

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

[TOPICS: MAUDS$,M$U$$$,MAUDR$]