Washington, DC, June 30--Personal spending was flat in May as personal income growth also slowed, according to an report from the Commerce Department.
Nominal incomes increased 0.2% in May as wages increased just 0.1%, the slowest gain since June 2004. In April, incomes rose a downwardly revised 0.6%, compared with a 0.7% increase originally recorded.
Nominal spending was unchanged in May, the weakest pace of spending since January.
Economists had expecting incomes to grow 0.4% and spending to increase 0.1%.
Inflation remained under control. Commerce Department data showed last month's personal consumption expenditure price index as unchanged, with the core PCE index, which excludes food and energy, up 0.2%.
Personal taxes increased 0.6% after a 2% gain in April.
Spending on services increased 0.6%, but spending on durable goods plunged 1.8% and spending on nondurable goods fell 0.4%.
Spending is up 3.4% year-on-year.
The personal savings rate improved to 0.6% of disposable income from 0.5% in April, which was the lowest since October 2001.
