Personal expenditures on footwear and apparel increased 1.79 percent to $505.44 billion in June compared to $496.57 billion in May, according to BEA.
The gain reflected the retail sales increase reported this month by the Census Bureau and the National Retail Federation (NRF). That reporting showed that clothing and clothing accessories store sales were up a seasonally adjusted 2.6 percent month-over-month and increased an unadjusted 49.4 percent year-over-year.
“We’re continuing to see an impressive recovery,” NRF chief economist Jack Kleinhenz said. “The economy and consumption are particularly sensitive to government policy and the boost we saw from government support earlier in the year is continuing to show benefits. Reopening of both stores and the overall economy has progressed and even higher prices seen in some retail categories reflecting the push-and-pull of supply chain challenges haven’t proven to be a deterrent to spending.”
Overall personal consumption expenditures (PCE) increased 1 percent, or $155.4 billion. BEA said the gain reflected an increase of $29.3 billion in spending for goods and a $126.1 billion increase in spending for services. Within goods, an increase in nondurable goods was partly offset by a decrease in durable goods.
Within durable goods, the decrease was primarily in motor vehicles and parts. Within services, increases were widespread across all spending categories, led by food services and accommodations.
The PCE price index increased 0.5 percent. Excluding food and energy, the PCE price index increased 0.4 percent. The PCE price index for June increased 4 percent from one year ago, reflecting increases in both goods and services. Energy prices increased 24.2 percent, while food prices rose 0.9 percent. Excluding food and energy, the PCE price index for June increased 3.5 percent from one year ago.
Personal income increased 0.1 percent, $26.1 billion, in June according to BEA. Disposable personal income (DPI), a key gauge of retail spending, was essentially flat at a monthly $2.6 billion. Real DPI, adjusted for inflation, decreased 0.5 percent in June.
“The estimate for June personal income and outlays reflected the continued economic recovery, reopening of establishments and continued government response related to the COVID-19 pandemic,” BEA said. “Government social benefits associated with pandemic-related assistance programs declined in June.”
The increase in personal income in June primarily reflected an increase in compensation of employees, BEA noted. Government social benefits decreased in June. Within compensation, the increase was primarily in private wages and salaries. Unemployment insurance also decreased, led by decreases in payments from the Pandemic Unemployment Compensation program.
Personal outlays increased $158.7 billion in June. Personal saving was $1.70 trillion in June and the personal saving rate–personal saving as a percentage of disposable personal income–was 9.4 percent.