U.S. Personal Income Climbs In Line With Estimates In August
27 September 2019 - 7:34PM
RTTF2
A report released by the Commerce Department on Friday showed
U.S. personal income rose in line with economist estimates in the
month of August, although personal spending inched up by less than
expected.
The Commerce Department said personal income climbed by 0.4
percent in August after ticking up by 0.1 percent in July. The
increase in income matched economist estimates.
Disposable personal income, or personal income less personal
current taxes, increased by 0.5 percent in August after rising by
0.3 percent in the previous month.
Meanwhile, the report said personal spending crept up by 0.1
percent in August after climbing by 0.5 percent in July. Spending
had been expected to rise by 0.3 percent.
Real spending, which is adjusted to remove price changes, also
inched up by 0.1 percent in August after rising by 0.3 percent in
the previous month.
"The August personal spending figures, which incorporated
downward revisions to earlier months, suggest that third-quarter
real consumption growth was 2.6% annualized, well below the 3.5%
gain we previously anticipated," said Paul Ashworth, Chief U.S.
Economist at Capital Economics.
Ashworth added, "As a result, we now estimate that third-quarter
GDP growth was 1.5% rather than 2.0%."
With income climbing by much more than spending, personal saving
as a percentage of disposable personal income jumped to 8.1 percent
in August from 7.8 percent in July.
A reading on inflation said to be preferred by the Federal
Reserve showed the annual rate of core consumer price growth
accelerated to 1.7 percent from 1.6 percent.
"Alongside the slowdown in consumption growth, the rebound in
underlying inflation is making the Fed's job just that little bit
harder," Ashworth said.
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