Personal incomes rise 0.5%, U.S. data show; inflation well contained
WASHINGTON (MarketWatch) — Incomes grew faster than spending in August, pushing up the nation’s personal savings rate, the Commerce Department estimated Friday.
Real consumer spending increased by a seasonally adjusted 0.2% for a second straight month, the government’s data showed.
In nominal terms, income rose 0.5% in August, after a 0.2% gain in July. Nominal spending rose 0.4% in August for the second straight month.
Real after-tax incomes rose 0.2% in August, after falling 0.2% in July.
Incomes rose more than the 0.3% that had been forecast in a survey of economists by MarketWatch.
With income rising faster than spending, the personal savings rate rose to 5.8% of disposable income from 5.7% in July.
Inflation rate steady at low levels
Consumer prices rose 0.2% in August, as measured by the personal consumption expenditure price index. Prices are up 1.5% compared with a year ago, the same pace as seen during July.
The Federal Reserve said in its latest policy statement that it is concerned that inflation will fall below its unofficial target. The U.S. central bank has set a 1.5%-2% annual increase in the personal consumption index as its desired inflation rate.
Core consumer prices — which exclude volatile food and energy prices — rose 0.1% in August and are up 1.4% in the past year.
August data details
Income from wages and salaries increased 0.3%
Income from small businesses rose 1.0% after a 0.2% gain in July.
Income from assets, such as dividends and interest, fell 0.6%.
Income from transfer payments increased 1.6%
Personal taxes increased 0.6% after rising 1.4% in July.
Real spending on durable goods decreased 0.1% after rising 1.0% in July. Spending on non-durable goods increased 1.4% after a rising 0.4% in July. Spending on services rose 0.2%.
