NEW YORK (CNN/Money) - Personal income and spending rose in May, the government said Friday, providing encouraging news about the engine that drives the world's largest economy.

The Commerce Department said personal income rose 0.3 percent after a revised 0.2 percent gain in April. Economists, on average, expected it to rise 0.3 percent, according to a Reuters survey.

Spending by consumers, which accounts for about 70 percent of the nation's economic activity, rose 0.1 percent after rising a revised 0.1 percent in April. Economists, on average, expected spending to rise 0.2 percent, according to Reuters.

U.S. stock market futures had little reaction to the news, continuing to trade higher, pointing to a positive opening on Wall Street. Treasury bond prices fell again.

Bond prices have fallen, pushing interest rates higher, since Wednesday, when the Federal Reserve cut its target for a key overnight lending rate by a lower-than-hoped quarter percentage point. The Fed also made comments interpreted by some as being more optimistic about the economy, encouraging the belief that the central bank was through cutting rates.

The Fed is likely to keep rates low for some time, however, out of concern that economic activity won't be strong enough to fend off deflation, an unstoppable drop in prices that hurts corporate profits and undermines the economy.

In the Commerce Department report, the Fed's favorite inflation measure, the personal consumption expenditure (PCE) price index, rose just 1.2 percent on a year-to-year basis, excluding food and energy prices, the lowest rate since September 2001.

Personal savings -- what's left of consumers' after-tax income after they're done spending -- rose to $283.4 billion from $271.5 billion in April. As a percentage of disposable income, savings rose to 3.5 percent from 3.4 percent in April.