Led by demand for durable goods, U.S. consumer spending continued to post gains in June, the government said in a report on Tuesday that also showed a smaller rise in incomes. 

Consumer spending rose by 0.4 percent in June to a $7.069 trillion annual rate, the Commerce Department said, boosted by a 1.5 percent gain in expenditures for durable goods -- items such as refrigerators and autos intended to last three or more years. Income growth, however, was slightly slower, increasing 0.3 percent to an $8.745 trillion rate. 

The personal saving rate, which measures saving as a percentage of disposable income. dipped to 1.1 percent in June from an upwardly revised 1.2 percent in May. The May saving rate was previously reported as negative 1.1 percent, but annual revisions swung that figure into the plus column. 

The data were better than had been expected by Wall Street. Analysts polled by Reuters had forecast that income rose by 0.2 percent while personal consumption was forecast to have climbed by 0.3 percent. 

The report's gauge of inflationary pressures in June was relatively tame. The chained index for personal consumption expenditures, a favorite of Federal Reserve Chairman Alan Greenspan, rose by only 0.2 percent, both overall and excluding often-volatile food and energy prices.