Zinger Key Points
- Although unemployment filings ticked down from the prior week, the number still came in slightly above economist expectations.
- There's a decrease in spending on vehicles and parts, but an increase in gasoline and other energy goods.
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The second quarter is set to come to a close Thursday and the S&P 500 is on pace to close out its worst first half of the year since 1970.
What To Know: Stock index futures are signaling a lower open after the Personal Income and Outlays report showed inflation measured by the personal consumption price (PCE) index remained unchanged in May at 6.3% year-over-year. This number was inflated by a 35.8% increase in energy prices and an 11% increase in food prices. Excluding food and energy, the PCE price index for May increased 4.7% from a year ago.
The PCE price index is the Federal Reserve's preferred measure of rising prices. It's released on a monthly basis and shows changes in the prices of goods and services purchased by consumers in the U.S.
According to Bureau of Economic Analysis data, personal consumption expenditures increased by $32.7 billion or 0.2% in May. Personal income increased $113.4 billion or 0.5% last month and disposable personal income jumped $96.5 billion or 0.5%.
The increase in personal income primarily reflects increases in compensation and proprietors' income, which were partially offset by a decrease in government social benefits.
The $32.7 billion increase in PCE reflects an increase of $76.2 billion in spending for services that was partially offset by a decrease of $43.5 billion in spending for goods. Increases in housing and utilities and health care were the largest contributors within services. Within goods, a decrease in spending on vehicles and parts was partially offset by an increase in gasoline and other energy goods.
Jobless Claims: For the week ending June 25, the advance figure for seasonally adjusted initial claims was 231,000, representing a decrease of 2,000 from the previous week. Although unemployment filings ticked down from the prior week, the number still came in slightly above economist expectations around 230,000, according to Bloomberg.
SPY Price Action: The SPDR S&P 500 SPY was down 1.15% at $375.89 at press time, according to data from Benzinga Pro.
Photo: Andrew Crump from Flickr.
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