**MNI 5 THINGS: US Core PCE Prices +0.2%; Y/Y Stays At +1.8%>

--5 Things We Learned From April Personal Income Data

By Kevin Kastner and Holly Stokes

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

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

Bureau of Economic Analysis: 

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

rate for the core measure holding steady at 1.8% after a downward 

revision to last month from the previously reported 1.9% gain. Core 

prices were stronger-than-expected month/month, as was PCE growth, so 

the combination is likely to concern some inflation watchers. 

     - The core PCE price index rose 0.2% (+0.157% unrounded), stronger 

than the 0.1% expected, after a 0.2% gain (+0.155%) in March. The y/y 

rate stayed at 1.8% (+1.803%) following a slight downward revision to 

the previous month's y/y rate, mostly due to rounding. The overall PCE 

price index was up 0.2% after a flat March reading as energy prices 

rebounded by 1.5% in the current month, while food prices were up 0.3%. 

The PCE price index y/y rate stayed at 2.0% in April. 

     - The savings rate fell to 2.8% from 3.0% in March, as previewed in 

an MNI 5 Things. It remains well below the 3.7% rate a year ago. The 

relatively low savings rate suggest some consumers continue to 

prioritize spending over savings. 

     - Current dollar PCE was up 0.6%, much faster than the 0.4% pace 

expected. Real PCE was up 0.4% following a 0.5% gain in March, and was 

up 2.7% SAAR through one month of the second quarter. Real PCE was up 

only 1.0% in the first quarter. April PCE was lifted by solid gains in 

both goods and services spending. 

     - Personal income rose 0.3%, as expected, led by a 0.4% rise in 

wages and salaries, as well as smaller gains in the other income 

categories. Personal taxes fell 0.5% after a 0.3% gain in March, so 

disposable personal income posted a 0.4% increase. Real disposable 

income rose 0.2%. 

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

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