US EditionConsumer spending was strong in August while inflation remained elevated
Consumer spending rose for a third month despite inflation holding at 2.9%, as savings dropped to 4.6%, indicating sustained economic activity amid price pressures.
- On Friday, the Bureau of Economic Analysis said personal consumption expenditures rose 0.6% in August, beating forecasts with a third consecutive solid monthly gain.
- Personal income rose $95.7 billion, a 0.4% gain, while disposable personal income climbed $86.1 billion as households increased spending on services and goods.
- The PCE price index increased 0.3% in August after gaining 0.2% in July, while Core PCE remained at 2.9% year over year, showing persistent inflation.
- With inflation above the Fed's 2% target, several policymakers are hesitant to cut rates despite the Federal Reserve last week lowering its benchmark overnight interest rate to the 4%-4.25% range and the personal saving rate easing to 4.6% in August.
- Growth estimates for the third quarter are converging around a 2.5% pace with tracking upgraded to around 3%, but economists warn spending may slow by year-end amid labor market cooling and high-income household risks.
20 Articles
20 Articles
Consumer spending outpaced income
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US Consumers Remain Resilient in August as Spending Tops Estimates - The Thinking Conservative
Consumers continued to support the U.S. economy as they opened their wallets in August, shrugging off modest increases in price pressures. The post US Consumers Remain Resilient in August as Spending Tops Estimates appeared first on The Thinking Conservative.
Trump’s tariffs are driving a wedge through the US economy, further separating the haves from the have-nots
By Alicia Wallace, CNN (CNN) — Americans ramped up their spending in August, despite elevated inflation, new data showed Friday. Consumer spending rose 0.6% from July, according to Commerce Department data released Friday. That was above expectations for a 0.5% bump, according to FactSet consensus estimates. The Personal Consumption Expenditures price index — the inflation gauge the Federal Reserve uses for its 2% target rate — rose 0.3% on a mo…
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