In May, personal spending rose by 0.3%, which was perfectly in line with expectations. The previous figure was upwardly revised from -0.1% to 0.0%. Personal income, on the contrary, came out much higher than expected rising by 1.4%, while an increase by 0.3% was forecasted. The April figure was upwardly revised from 0.5% to 0.7%. The surge in personal income was mainly due to surging transfer payments, which are part of the fiscal stimulus package from the US government. The savings rate rose further in May from 5.6% to 6.9% and PCE core came out at 0.1% M/M, closely matching expectations. In the coming months, it will be interesting to see whether the increase in personal income will encourage consumers to spend more.
The final figure of Michigan consumer confidence showed a slight upward revision in June. The headline index was upwardly adjusted from 69 to 70.8, while no revision was forecasted. Looking at the sub-indices, the improvement was entirely due to a rise in the outlook (69.2 from 65.4), while the economic conditions sub-index deteriorated slightly (73.2 from 74.5). The upward revision is an encouraging sign as the first estimate disappointed somewhat.
EMU: German CPI stays flat in June
In Germany, CPI inflation stayed unchanged at 0.0% Y/Y in June, while the consensus was looking for a slightly negative outcome. On a monthly basis, CPI inflation rise by 0.4% M/M, while an increase by 0.2% M/M was forecasted. Belgian CPI, on the contrary, dropped into negative territory in June. On a yearly basis, CPI came out at -1.1% Y/Y (from -0.37% Y/Y). Next week, the consensus is looking a euro zone inflation figure of -0.2% Y/Y, but the risks might be on the upside of expectations after the higher than expected German outcome.
