By Jeffry Bartash
WASHINGTON (MarketWatch) - Consumer spending in the U.S. rose a modest 0.4% in June, as Americans spent more on staples such as gasoline as well as services such as eating out and personal care. And spending in May was revised a tick higher to show a 0.3% gain. Americans continue to spend at a pace that's likely to keep the economy growing around 2% to 2.5% a year, but they would have to sharply increase outlays to return the U.S. to its historic growth rate of 3.2%. Spending has been slower than usual because wages are not rising as fast as they typically do. Personal income rose 0.4% in June. Economists surveyed by MarketWatch had forecast a seasonally adjusted 0.5% increase in spending and a 0.4% gain in income. The amount of money individuals save - the savings rate - was unchanged at 5.3%. In the past 12 months consumer spending has climbed an inflation-adjusted 2.3%, the same as in May. Real disposable income - the money left over after taxes - has risen at the same pace during the 12-month period from June 2013 to June 2014. Meanwhile, inflation as gauged by the PCE price index rose by a slower 0.2% in June after a 0.3% gain in May. The core rate that excludes food and energy edged up 0.1% in June. The PCE index climbed 1.6% in the 12 months ended in June, down from 1.7% in the prior month. The 12-month rate for the core PCE index was flat at 1.5%, well within the range the Federal Reserve considers acceptable.
