Personal spending in June grew 0.5 percent, its fastest pace February, while personal income rose 0.3 percent, the ""Bureau of Economic Analysis"":http://bea.gov/newsreleases/national/pi/2013/pdf/pi0613.pdf reported Friday. Economists had expected income and spending each to grow 0.4 percent.[IMAGE]
Data for May were revised to show income grew $49.5 billion, a gain of 0.4 percent instead of the originally reported 0.5 percent or the $69.4 billion increase.
The changes to the May data were part of a larger revision dating back to 1929.
By the numbers, income grew $45.4 billion, while spending was up $59.4 billion, the largest month-over-month increase since February when spending rose $75.7 billion.
Most of the spending increase in June was for goods, up $44.2 billion, with spending on non-durable goods increasing $33.5 billion. Durable goods, which signal consumer confidence since they are usually paid for with[COLUMN_BREAK]
borrowed funds, increased $10.7 billion. In May, spending on durables increased $7 billion while spending for non-durables was up $11.6 billion.
Compensation--wages and salaries along with health and pension contributions by employers--accounted for most of the increase in income, $41.7 billion.
Farm income, struggling against heavy rains and severe drought in various parts of the country, fell $24 billion in June after dropping $24.1 billion in May. Farm income in June was down almost 20 percent from May although it was up 27 percent from June 2012.
Government transfer payments--Social Security and Medicaid--increased $5.9 billion in June after jumping $18.3 billion in May. Payments in May were artificially boosted because June 1 was a Saturday, accelerating some program payouts to May. Unemployment insurance payments dropped $2.8 billion in June, reflecting an improving job market and the impact of the federal budget sequester. In response to the sequester, many states have reduced unemployment insurance payments or the number of weeks an individual can receive them. Unemployment insurance payments have declined each month this year.
With spending exceeding income, personal savings fell $21.7 billion in June, and the personal savings rate dropped to 4.4 percent from 4.6 percent in May.
Despite rising interest rates, personal interest payments for non-real estate related debt fell $4.3 billion in June.
_Hear Mark Lieberman next Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:20 am eastern time._