The Commerce Department reported on Friday that consumer spending in the U.S. climbed 1.0 percent m-o-m in June after a revised 0.1 percent m-o-m drop in May (originally unchanged m-o-m). This marked the biggest monthly rise in consumer spending since March. Economists had forecast the reading to show a 0.7 percent m-o-m gain.

Meanwhile, consumer income edged up 0.1 percent m-o-m in June, following a revised 2.2 percent m-o-m drop in the previous month (originally a 2.0 percent m-o-m decline). This marked the first monthly increase in consumer income in the last three months. Economists had forecast a 0.3 percent m-o-m decrease.

The June advance in personal income primarily reflected a gain in compensation of employees. Meanwhile, government social benefits fell in June.

The personal consumption expenditures (PCE) price index, excluding the volatile categories of food and energy, which is the Fed's preferred inflation measure, rose 0.4 percent m-o-m in June, following an unrevised 0.5 percent m-o-m increase in May. Economists had projected the index would advance 0.6 percent m-o-m.

In the 12 months through June, the core PCE surged 3.5 percent, accelerating from an unrevised 3.4 percent in the 12 months through May. Economists had forecast a jump of 3.7 percent y-o-y.