(RTTNews) - Friday's economic news flow was dominated by the release of data showing that US personal income and spending rose more than expected, as well as a report showing that consumer sentiment dwindled to its lowest in almost three decades.

Personal income showed a substantial increase in the month of May, according to a report released by the Commerce Department on Friday, although the increase was largely due to the rebates sent out as part of the government's economic stimulus plan.

The report showed that personal income surged up 1.9 percent in May following an upwardly revised 0.3 percent increase in April. The increase in personal income marked the fastest pace of growth since September of 2005.

However, the bigger than expected increase in personal income was largely due to the $48.1 billion in rebate payments issued by the government during the month. Excluding the rebate payments, personal income increased by only 0.4 percent.

The Commerce Department also said that personal spending jumped 0.8 percent in May after an upwardly revised 0.4 percent increase in April. The increase, which marked the fastest growth since November, came in slightly above economist estimates of a 0.7 percent increase.

The report also showed that consumer prices excluding food and energy prices edged up 0.1 percent in May after showing a 0.1 percent increase in April. On an annual basis, prices were up 2.1 percent compared to the same month last year.

Meanwhile, consumer sentiment fell to another 28-year low in June, signaling that US Americans remain deeply pessimistic about the economy. The Reuters/University of Michigan Consumer Sentiment Index came in at 56.4, a slightly worse-than-expected result.

The decision by the Federal Reserve to take the drastic and unprecedented step of helping financial giant Bear Stearns avoid a collapse by facilitating its sale to JPMorgan & Chase was discussed and voted on by four Fed officials, minutes from the two meetings in mid-March released Friday revealed.

On March 14th, the Federal Reserve's Board of Governors discussed the "funding difficulties" of Bear Stearns, including the "likely effects of its bankruptcy on financial markets," according to the minutes.

"The Board's decision to establish a facility for primary securities dealers was based on recent, rapidly changing developments," the minutes read, noting that the credit markets were so tight that "dealers might have difficulty obtaining necessary financing for their operations from alternative sources."

With that decision, the Federal Reserve Board of Governors voted to facilitate the sale of Bear Stearns to JPMorgan & Chase. To date, Bear Stearns and its 85-year history on Wall Street is the largest casualty of the credit crunch.

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