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US Personal Income, Spending, Price Growth Expected to Accelerate

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Personal income is forecast to rise by 0.4% in May, based on a survey compiled by Bloomberg, following a flat reading in April.

The report on personal income and consumption for May is scheduled to be released at 8:30 am ET Thursday.

Wages and salaries are seen as a positive for the headline figure. Private nonfarm payrolls rose by 172,000 in May after a 179,000-jobs increase in April, while the average workweek remained at 34.3 hours, lifting the aggregate hours index by 0.1% in the month. Hourly earnings rose by 0.3% in May after a 0.2% gain in the previous month.

For consumption, control group retail sales, which exclude motor vehicles, gas building materials and food services and feeds into the goods PCE calculation, rose by 0.8% in May after a 0.4% gain in the previous month.

Analysts expect personal consumption to increase by 0.6% in May after a 0.5% gain in April. Real PCE, consumption after adjustment for inflation, is expected to increase by 0.2% after 0.1% gain.

PCE prices are forecast to rise by 0.5% after a 0.4% gain in the April report, while core prices are expected to increase by 0.3% after a 0.2% gain.

Analysts expect the year-over-year rate for overall PCE prices to accelerate to 4.1% from 3.8% in April while core PCE prices are seen at a 3.4% rate, up from 3.3% in April.

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