US August consumer spending up 0.3pc

Consumer spending rose 0.3pc in August, while personal income increased 0.4pc, the US Commerce Department said today.

The increases in both consumer spending and income were below market expectations.

Wall Street economists estimated spending and income would both rise 0.5pc in August.

In July, consumer spending rose 1.0pc while personal income remained unchanged.

The rise in spending in August was due to a notable gain in durable goods spending which was supported by gains in both nondurable goods and services spending.

Durable goods spending rose 1.4pc in August. Spending on non-durable goods and services increased 0.2pc respectively.

Disposable personal income, or income less personal tax payments, rose 0.4pc in August, compared with a 0.2pc rise the month before.

Wages and salaries increased 0.5pc in August to $5.037 trillion, after falling 0.3pc in the previous month.

The personal savings rate, personal saving as a percentage of disposable personal income, was 3.6pc in August, up slightly from 3.5 in July.

The income and spending data are adjusted for seasonal variations but not inflation.

Inflation, as measured by the personal consumption expenditures (PCE) deflator, rose 0.2pc in August after rising 0.1pc in July. The Federal Reserve now uses the PCE price index as its prime gauge of consumer inflation, replacing the CPI data.

Excluding food and energy prices, the PCE deflator rose 0.3pc in August following a 0.1pc in July.

On a year-on-year basis, the PCE deflator was up 1.5pc, compared with a 1.2pc rise in July. Excluding food and energy, it was up 1.7pc year-on-year, compared with a 1.5pc rise in July.

Adjusted for inflation, consumer spending rose 0.1pc in August, compared with a 0.9pc rise the previous month. Disposable personal income rose 0.2pc, after remaining unchanged in July.