US consumers boosted spending in May after a slowdown the previous month as personal income grew far more than expected, official data released Thursday showed.
Consumer spending -- the engine of the US economy -- rose 0.3 percent, led by purchases of manufactured durable goods, the Commerce Department said.
The May gain followed a 0.3 percent decline in April. Analysts had forecast a stronger 0.4 percent rebound.
Personal income jumped 0.5 percent last month, well above the 0.2 percent estimate, in the fourth consecutive month of gains.
Year-over-year, consumer spending was up 1.8 percent and personal income gained 1.1 percent.
Inflation remained tame. The personal consumption expenditures price index edged up 0.1 percent in May, after falling 0.3 percent in April.
The core PCE price index, excluding food and energy, also was up 0.1 percent, barely changed from a nearly flat reading in the prior month.
The year-over-year core reading, closely watched by the Federal Reserve, was up only 1.1 percent.
"Core PCE inflation remains well below the Fed's 2.5 percent 'threshold' for raising the funds rate, although it did not slow any more this month," said Jim O'Sullivan of High Frequency Economics.
Americans boosted their savings in May, pushing the personal savings rate up two-tenths point to 3.2 percent.
Jennifer Lee of BMO Capital Markets noted there were downward revisions on consumer spending to a few prior months.
"Second-quarter consumer spending is coming in at just 1.2 percent annualized, the slowest since mid-2011. This is very disappointing, and comes even as incomes pick up," she said.
On Wednesday, the Commerce Department lowered its estimate of first-quarter US economic growth to just 1.8 percent, saying consumer spending had been weaker than previously thought.
Peter Newland of Barclays Research said the firm was now tracking second-quarter growth of 1.4 percent for both consumer spending and gross domestic product, "consistent with our view that household-sector spending growth lost some momentum in the second quarter."