Washington, DC, August 1, 2006--Personal incomes rose 0.6% in June, outpacing the 0.4% increase in consumer spending.
The personal savings rate rose to negative 1.5% from negative 1.6%, the 15th consecutive month of negative savings. Consumers can have negative savings by spending previous savings, or by borrowing or selling assets to support their consumption.
The gains in monthly incomes, spending and inflation were exactly as expected by Wall Street economists.
After adjusting for inflation, real consumer spending rose 0.2%, the fourth straight month of tepid spending. After inflation, real take-home pay rose 0.4%, the biggest increase in disposable income since December.
The June data on incomes, spending and inflation provided monthly detail to quarterly figures released last Friday in the report on gross domestic product.
Incomes got a boost from higher hourly wages. Compensation of employees increased 0.6% in June, with wages also up 0.6%.
Income from assets rose 1.5% in June, the third straight gain over 1%. Proprietors' income increased 0.1%.
Real spending on durable goods rose 0.5%, the first gain in three months. Real spending on nondurable goods increased 0.3% and real spending on services increased 0.1%, the weakest gain since January.
