By Andrew Williams
Washington, July 5 (BridgeNews) - In an unusual move, the U.S. Department of Commerce Thursday announced it has revised U.S. May personal spending growth to up 0.3%, from up 0.5% as initially reported Monday in the monthly Personal Income and Outlays report. Commerce said a "computational" error necessitated the revision.
In a statement, Commerce said personal consumption expenditures (PCE) were overstated by $12.3 billion. "The error was in...estimates of consumer purchases of light trucks," Commerce said.
Commerce also said the inflation-adjusted "real" PCE for May has been revised to up 0.2%, from up 0.3%.
The revision to spending resulted in an adjustment to the personal savings rate, which was revised to minus 1.1%, after being originally reported at minus 1.3%, Commerce said.
Human and computer error were both behind the initial mistake, according to Steve Landefeld, director of the Bureau of Economic Analysis at Commerce. Economists failed to input a seasonal adjustment factor, after which the department computers put in a default estimate without alerting the compilers of the report.
Landefeld said the mistake should have been caught in the normal review process. The Bureau will reassess procedures to make sure upcoming reports are error free, he said.
An economist at the Federal Reserve Board alerted Commerce to the mistake Tuesday afternoon, according to Landefeld. The economist had been reviewing the detailed unit values and prices data included in the report.
Landefeld said the mistake only affected the May report.