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

--5 Things We Learned From May Personal Income Data         

By Sara Haire and Harrison Clarke

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

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

Bureau of Economic Analysis: 

     - The data suggest inflation is not retreating, with the year/year 

rate for the core measure jumping up to 2.0% and the PCE price index 

rising to 2.3%. This data could cause inflation hawks to be concerned, 

however inflation was expected to rise.  

     - The core PCE price index +0.2% m/m (+0.21257% unrounded), as 

expected, after a +0.2% gain (+0.17192%) in April. The y/y rate jumped 

to 2.0% following a 1.8% gain in April. The overall PCE price index was 

up 0.2% m/m after a 0.2% April reading as energy prices rose by 0.9% in 

the current month, while food prices were down 0.2%. The PCE price index 

y/y rate rose to 2.3% in May. 

     - The savings rate surprisingly jumped to 3.2% from 3.0% in April. 

This still remains below the May 2017 level of 3.8%, suggesting 

consumers continue to prioritize spending over savings. 

     - Current dollar PCE was up 0.2%, smaller than the 0.4% gain 

expected. Real PCE was flat following a 0.3% gain in April, and was up 

2.3% SAAR through two months of the second quarter. May PCE was lifted 

by mild gains in both goods and services spending, but real PCE had a 

solid gain in goods spending, but a decline in services spending. 

     - Personal income was up 0.4%, right on target with analysts' 

expectations, led by a 0.3% rise in wages and salaries, as well a a 

large 0.7% gain in personal income receipts on assets, as well as 

smaller gains in other income categories. Personal taxes declined by 0.2 

after a 0.4% decline in April. Disposable personal income posted a 0.4% 

rise. Real disposable income rose 0.2%. 

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

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