U.S. consumer spending was flat in May for the first time in five months as Americans eased off on vehicle purchases amid tepid wage growth, but subsiding inflation pressures should keep demand supported.
The Commerce Department said on Friday April's consumer spending was revised down to show only a 0.1 percent rise instead of the previously reported 0.3 percent gain.
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Weak consumer spending in May also reflected tepid sales at service stations as the pump price of gasoline fell from lofty levels early in the year.
Spending rose 0.1 percent after adjustment for inflation. Consumer spending accounts for more than two-thirds of U.S. economic activity. The small rise could cause economists to tweak their second-quarter forecasts for real consumer spending - currently in a range of 2 percent to 2.3 percent.
Spending grew at a 2.5 percent annual rate in the first quarter, with the overall economy expanding at a modest 1.9 percent rate.
Weak gasoline prices put downward pressure on inflation. A price index for personal spending fell 0.2 percent in May, the first decline in a year. The index was flat in April.
In the 12 months through May, the PCE index was up 1.5 percent, the smallest increase since January last year. It increased 1.9 percent in April.