Personal income in the US declined last month and personal spending rose slightly, according to Department of Commerce on Friday.

In May, personal income decreased $414.3 billion, or 2%, from the previous month, while personal spending increased $2.9 billion, less than 0.1%.

Market expectation for personal income was a decline of 2.5% in May, while it plummeted 13.1% in April. Market estimate for personal spending was an increase of 0.4% last month, while it rose 0.9% the previous month.

The personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation indicator, increased 0.4% in May. Core PCE index, excluding food and energy, rose 0.5% from the previous month. Year-over-year, they were up 3.9% and 3.4%, respectively.

The Fed has repeatedly said in recent months it will allow inflation to climb slightly above its 2% target to revive American economy from the pandemic until raising interest rates.

The central bank, however, signaled last week it could make two rate hikes, by 0.25% each, in 2023 against rising inflation.

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