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US personal income and spending rise in July, boosting disposable income

The July report also kept PCE inflation at 3.7% headline and 3.3% core on a 12-month basis, leaving expectations focused on next month’s nonfarm payrolls.

Reported · Written up by our desk · Major Pairs

U.S. nominal personal income rose 0.4% in July, double what economists expected, according to a note from NBC Economics and Strategy via FXStreet. Monthly personal spending increased 0.2%, while real disposable income climbed 0.4% with real spending reported as flat.

The same update said the services sector led the 0.2% rise in personal spending. After adjusting for inflation, households saw disposable income increase, while spending did not add to real growth.

On inflation, NBC Economics and Strategy reported the July headline PCE deflator held at 3.7% year over year, unchanged from the prior month. Core PCE was also unchanged at 3.3% on a 12-month basis, and both measures rose 0.2% on a monthly basis.

Looking ahead, the note said the August nonfarm payroll release is expected to draw significant attention. It projects payrolls to increase by about 80K, with unemployment staying at 4.1% if labor force participation rises to 61.5%.

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