United States consumer spending rose by 0.6% in August amid increases in transportation, food, and accommodation, while the personal consumption expenditures (PCE) price index grew by 0.3%.
Personal spending was up by US$129.2 billion last month, according to the U.S. Bureau of Economic Analysis. Spending on transportation services grew by $13.9 billion, the largest amount of any sector.
Growth in personal spending “reflected increases of $77.2 billion in spending on services and $52.0 billion in spending on goods”, the Bureau said.
Food services and accommodations saw the second-highest increase, at $13.0 billion. Recreational goods and vehicles posted the third-highest growth, and the highest of any goods-related sector.
U.S. personal income was up by $95.7 billion, or 0.4%. Disposable personal income also increased by 0.4%.
“Personal saving was $1.06 trillion in August and the personal saving rate—personal saving as a percentage of disposable personal income—was 4.6 percent,” wrote the Bureau of Economic Analysis.
The personal consumption expenditures price index increased by 0.3% last month. It was up 2.7% year-over-year, compared with 2.6% in July, and above the Federal Reserve’s 2% target.
Price levels excluding food and energy rose by 0.2% in August and by 2.9% year-over-year, remaining stable from July. Both headline and core inflation numbers were in line with market estimates.
Meanwhile, U.S. gross domestic product (GDP) increased at an annualised rate of 3.8% last quarter, the Bureau of Economic Analysis said last week. This was revised upwards from its previous estimate of 3.3%.
The Federal Reserve also cut rates by 0.25% earlier in September for the first time in nine months. Investors believe there is an 89.3% chance of the central bank cutting rates again in October, according to CME FedWatch.
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