Inflation remained high at 6.3% in May and household spending slowed, the PCE index, one of the key inflation indicators released by the Treasury Department, showed on Thursday.
Price acceleration up to 0.6%
During the month, however, prices accelerated to 0.6%, compared to 0.2% in April. Household spending slowed to +0.2% from 0.6% in April as consumers were penalized by rising inflation. Another inflation indicator, the CPI index, published by the Department of Labor and used specifically to calculate pensions, recorded an 8.6% year-over-year price increase in May. The evolution of household spending slowed to +0.2% from April’s 0.6% (revised downwards by 0.3 points), with consumers penalized by rising inflation and income growth, unchanged from the previous month (+0, 5%, revised upwards by 0.1 point).
If the slowdown in household spending continues in June, it could weigh on gross domestic product in the second quarter, while consumption is the main driver of the US economy. Already in the first quarter, the gross domestic product (GDP) of the United States contracted slightly more than originally forecast, falling by 1.6% year-on-year, mainly due to a downward revision in personal consumption spending.
Source: Le Figaro
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