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Despite the robust second quarter consumer spending, real Personal Consumption Expenditures (PCE) only rose 0.2% in June according to today's release of Personal Income and Outlays report by the BEA.

Personal Income

Disposable personal income (DPI) increased $69.7 billion (0.4 percent). Real DPI increased 0.3 percent.

The increase in personal income in June primarily reflected increases in wages and salaries, government social benefits to persons, and supplements to wages and salaries.

Real PCE

Real PCE increased 0.2 percent. The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

The $21.4 billion increase in real PCE in June primarily reflected a $19.5 billion increase in spending for nondurable goods and a $4.6 billion increase in spending for services, that was partially offset by a decline of $1.5 billion in spending for durable goods. Within nondurable goods, other nondurable goods (including pharmaceutical products) was the leading contributor to the increase. Within durable goods, motor vehicles and parts was the leading contributor to the decline.

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Personal saving was $1.34 trillion in June and the personal saving rate, personal saving as a percentage of disposable personal income, was 8.1 percent.

Rate Cut Expectations

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Those looking for another excuse, any excuse for the Fed to cut 50 basis points tomorrow will latch on to this report. But the odds dipped to 20.9%.

Those wanting shock-and-awe are unlikely to get it, if you believe the current positioning of traders.

Mike "Mish" Shedlock