U.S. consumer spending barely rose in June as personal income failed to increase for the first time in seven months amid a decline in dividend payments, pointing to a moderate pace of consumption growth in the third quarter.
The Commerce Department said on Tuesday that consumer spending, which accounts for more than two-thirds of U.S. economic activity, edged up 0.1 percent in June after an upwardly revised 0.2 percent gain in May.
There was also little sign of inflation. The personal consumption expenditures (PCE) price index, excluding food and energy, rose 0.1 percent in June after a similar gain in May. In the 12 months through June, the so-called core PCE price index increased 1.5 percent after advancing by the same margin in May.
The core PCE is the Federal Reserve's preferred inflation measure. The U.S. central bank has a 2 percent target.
The data was included in the second-quarter gross domestic product report published last week. That report showed consumer spending increasing at a 2.8 percent annualized rate, which accounted for the bulk of the economy's 2.6 percent growth pace during the quarter.
U.S. stock index futures pared gains slightly after the data while the dollar held gains. Prices of U.S. Treasuries were trading lower.