Inflation ballooned in June

Personal spending increased 0.8% in June, marking the steepest one-month gain since a 1% increase in February 1981. Personal income inched up slightly in June, but that number was eclipsed by higher personal spending, as higher food and energy prices put a strain on consumers' wallets, according to a report by the Department of Commerce. Core personal consumption expenditures, excluding food and energy, rose to 2.3%, from 2% in June 2007. The core PCE reading stood at 2.2% in March, April and May. Personal income rose 0.1% in June after it rose by a revised 1.8% in May. New orders for manufactured durable goods rose 0.8% in June, which followed a 0.1% increase in May. Shipments and orders for non-durable goods increased 2.5% for the month, mostly due to higher energy and commodities prices. Excluding transportation items, new orders increased 2.3%.