U.S. consumer spending posted a fourth-straight solid advance in June, fueled by steady income growth and underscoring strength in the biggest part of the economy. Inflation, meanwhile, topped estimates.
Purchases, which account for about 70 percent of the economy, rose 0.4 percent after a revised 0.5 percent advance that was larger than previously estimated, Commerce Department figures showed Tuesday. Incomes also climbed 0.4 percent in June, matching the May increase. The Federal Reserve’s preferred measure of inflation rose 2.2 percent on a year-over-year basis for a second month.
The results are in sync with data reported last week that showed a solid labor market, lower taxes, and improving finances buoyed consumer purchases, driving an acceleration in second-quarter economic growth. A core measure of inflation stayed within striking distance of the Fed’s 2 percent goal, though a touch shy of the median projection.
The Fed’s preferred inflation gauge — tied to consumption — rose 0.1 percent after the previous month’s 0.2 percent gain. June’s year-over-year increase marked the third month in the last four that this measure exceeded the central bank’s…