WASHINGTON, June 28 (Xinhua) -- U.S. personal income increased 0.5 percent in May while inflation remained below the target set by the Federal Reserve, the U.S. Department of Commerce said on Friday.
Personal income in the United States increased 88.6 billion U.S. dollars in May, while disposable personal income increased 72.6 billion dollars, both 0.5 percent higher month-on-month, according a monthly report by the Bureau of Economic Analysis of the department.
Personal consumption expenditures (PCE), a measure of household spending, were up 59.7 billion dollars in May, 0.4 percent higher than the April reading, said the report.
The PCE price index increased 0.2 percent month-on-month in May. Excluding the volatile food and energy prices, the core PCE price index increased 0.2 percent.
On a year-on-year basis, the core PCE price index, a preferred inflation gauge by the Fed, was up 1.6 percent in May, below the central bank's target inflation rate of 2 percent.
"Although inflation has been running somewhat below our symmetric 2 percent objective, we have expected it to pick up, supported by solid growth and a strong job market," Fed Chairman Jerome Powell said Tuesday in a speech at the Council on Foreign Relations in New York.
Amid calls for lowering the benchmark interest rate, Fed officials kept the federal funds rate in a range between 2.25 percent to 2.5 percent after the June 18-19 policy meeting.
Acknowledging that participants of the Federal Open Market Committee (FOMC), the Fed's monetary policy-making body, "saw no strong case for adjusting our policy rate" at the latest meeting, Powell said the "favorable picture" has changed since then.
"The crosscurrents have re-emerged, with apparent progress on trade turning to greater uncertainty and with incoming data raising renewed concerns about the strength of the global economy," the central bank chief said, adding, however, that FOMC members' baseline outlook for the U.S. economy "remains favorable."
The Commerce Department's data also showed that personal saving was 985.4 billion in May, up from the April figure of 975 billion dollars.
The personal savings rate, or personal savings as a percentage of disposable personal income, was 6.1 percent in May, the same as the prior month.
