--US May personal income +0.2%; spending +0.5%
--US May wages and salaries +0.2%
--US May services spending +0.3%; durable goods spending +1.2%
--US May personal saving rate dn to 1.3%; April revised to -1.0%
--US May PCE price index +0.1%; core PCE prices -0.1%
--US April personal income revised to +0.2% from +0.3%
--US April personal spending revised to +0.5% from +0.4%

By Andrew Williams
Washington, July 2 (BridgeNews) - Despite the slowing U.S. economy, personal spending rose 0.5% in May, while incomes rose only 0.2%. The spending pace was above analysts expectations for a 0.4% rise, while income growth was below the expectation for a 0.3% increase. The meager savings rate was forced to a negative 1.3%, matching the record low set in January.
According to the Commerce Department report Monday, personal income in April was revised to a 0.2% gain from the previously reported 0.3% gain, while spending was revised to a 0.5% gain from a rise of 0.4%. The Commerce Department said spending on services, anything from utility payments to vacations, rose 0.3%, after having been revised to up 0.3% in the prior month. Services make up about 60% of consumer expenditures.
Spending on durable goods like appliances and furniture rose 1.2%, after rising a revised 0.1% in April.
Durable goods are those with a lifespan of over three years, such as cars and electrical appliances, meaning they are the most sensitive to changes in interest rates.
Meanwhile spending on non-durable goods such as food, clothing and gasoline, rose 0.5%.
On the income side, wages and salaries, which comprise over half of personal income, posted a 0.2% increase, after a rising 0.3% the prior month.
However, disposable income--personal income minus tax and some non-tax payments--rose 0.2%, Commerce said.

INFLATION
The implicit price deflator for personal consumption expenditures, the Federal Reserve's preferred gauge of consumer inflation, rose 0.1%, following the revised increase of 0.2% of April. Excluding volatile food and energy prices, the deflator also fell 0.1% following a 0.2% advance the prior month.

WHAT WAS EXPECTED:
Estimates of economists surveyed by BridgeNews ranged from up 0.2% to up 0.5% for both income and spending.