WASHINGTON, DC: The US Commerce Department reported Tuesday that consumer spending rose 0.4% in June, down from 0.6% in May. Income grew 0.6% in June, versus a rise of 0.4% in May.

The report also shows that a closely watched Federal Reserve inflation index has grown 2.4% over the past year — the fastest pace since 2002. That's above the Fed's core inflation target range of 1%-2%, excluding food and energy prices.

Merrill Lynch analyst David Rosenberg called the recent increase in inflation "vivid" but predicts it won't last as economic activity slows.