Americans earned more in June yet saved less, according to the latest Personal Income and Outlays report from the Bureau of Economic Analysis. Personal income rose 0.2 percent, or $54.9 billion, while disposable personal income (DPI) increased at the same pace. Consumers did not retain the additional income for long: personal consumption expenditures (PCE) rose 0.3 percent, pulling the already low personal saving rate down to 2.7 percent. Even with a small month-to-month decline in the headline PCE price index, overall inflation remains well above the Federal Reserve's stated 2 percent goal, a backdrop that accompanied gold past $4,100 an ounce on Thursday.

A closer look at the data shows June's spending increase flowed largely into services, up $58.2 billion, while goods spending added $7.0 billion. After adjusting for inflation, real PCE increased 0.4 percent, outpacing nominal income growth and indicating that households are drawing on savings to cover daily expenses. The headline PCE price index fell 0.1 percent following a 0.5 percent increase in May, and core PCE, which excludes food and energy, rose 0.1 percent. Prices remain 3.7 percent above year-ago levels on the headline measure and 3.3 percent on the core gauge, still well above the Federal Reserve's 2 percent price stability goal.

June's income gains reflected higher private-sector wages and salaries, along with higher dividend and interest income. Government transfer payments also increased, supported by larger Medicare and Social Security payments. Offsetting those gains, farm proprietors' income fell as support payments under the American Relief Act expired, reflecting how funding decisions made in Washington can shift quickly. Separately, the BEA revised its April and May estimates to incorporate new employment and Medicaid data, a routine update reflecting newly available source information.