In May, US personal income rose by 0.3%, slightly less than expected as the consensus was looking for an increase by 0.4%. Even more disappointing was the stabilization in personal spending, while a slight increase was expected and also the previous figure was downwardly revised. For the first time in almost one year personal spending didn’t increase. Personal consumption expenditures for durable goods fell by 1.5% driven by a sharp decline in new motor vehicle sales. PCE for non-durables fell by 0.3% due to weakness in food store purchases. The Core PCE deflator was up by 1.2% Y/Y, more than expected, but still significantly below 2.0% Y/Y. The savings rate picked up again, rising from 4.9% to 5.0%. The figures indicate that consumer spending weakened in May due to higher prices while consumer also increased savings. Q2 PCE will be weak suggesting that also Q2 GDP will be weak again.