The U.S. Commerce Department said Thursday that PCE consumer spending increased $144.6 billion in July. The PCE price index showed inflation, excluding food and energy, was 4.2% from a year ago. Photo by John Angelillo/UPI | License Photo
Aug. 31 (UPI) -- The U.S. Commerce Department's Bureau of Economic Analysis reported Thursday that consumer prices rose slightly in July.
The Personal consumption expenditures, or PCE, price index ticked up by 0.2% as the key inflation gauge favored by the Federal Reserve also showed that PCE inflation was up 3.3% from year-ago levels.
Data also showed that personal income increased $45 billion in July while personal consumption expenditures increased $144.6 billion.
The growth in income was 0.2% for July while consumer spending was up 0.8% for the month.
Over 12 months goods prices dropped by 0.5% while services prices grew by 5.2%.
Food prices were up 3.5% from a year ago but energy prices were 14.6% lower, according to the BEA. Excluding food and energy, the PCE price index was up 4.2% from one year ago.
"The $144.6 billion increase in current-dollar PCE in July reflected increases of $102.7 billion in spending for services and $41.9 billion in spending for goods," the BEA said in a statement. "Within services, the largest contributors to the increase were financial services and insurance (led by portfolio management and investment advice services), housing and utilities (led by housing), food services and accommodation (led by food services), and health care (led by outpatient services)."
According to the BEA, spending growth on goods was led by pharmaceuticals and recreational items, food, beverages and groceries, recreational goods and vehicles led by video, audio, photographic, and information processing equipment and media.
Prices for goods in general actually dropped by 0.5%. But services prices were up 0.4% while food prices were up 0.2% and energy prices rose by 0.1% for the month.
U.S. personal savings were $705.6 billion in July while the personal saving rate was 3.5%.