Consumer spending in the U.S. was flat in May for the first time in five months, the Commerce Department said Friday, as slower job creation and stagnant wage growth prompted Americans to cut back.
April's consumer spending was revised down to show only a 0.1 percent rise instead of the initially reported 0.3 percent gain.
Personal income climbed 0.2 percent for a second month in May, matching the median projection in the Bloomberg survey. Since income rose faster than spending, the personal savings rate increased to 3.9 percent from 3.7 percent.
Also in May, inflation as gauged by the personal consumption expenditures (PCE) price index fell 0.2 percent. Excluding food and energy, the price index rose 0.1 percent.
Looking ahead, the recent fall in gasoline prices will soon boost real consumption. But a sustained and significant acceleration in consumption growth cannot take place without faster jobs growth too, said Paul Dales, senior US economist at Capital Economics, in a note.