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US PCE inflation comes in softer as consumer spending accelerates

Personal spending jumped 0.9% month over month in August, but personal income slowed to 0.2%, leaving the saving rate at 4.1%.

Reported · Written up by our desk · Economy

US consumer spending accelerated sharply in August even as income growth weakened, according to data reported by Action Forex. Personal spending rose from a revised 0.1% to 0.9% month over month, topping the 0.8% forecast, while personal income slowed from a revised 0.3% to 0.2%, below the 0.5% consensus.

The report also showed inflation running below expectations. The PCE Price Index increased to 0.3% month over month from a revised 0.1%, versus a 0.4% forecast, while core PCE rose to 0.2% month over month from 0.1%, versus 0.3% expected.

On an annual basis, headline PCE inflation fell to 3.4% year over year versus 3.7% expected, and core inflation eased to 3.0% year over year versus 3.4% consensus, Action Forex said.

Action Forex added that the spending strength was not purely a price effect, citing that real PCE increased 0.6% month over month while real disposable personal income was unchanged, alongside a personal saving rate of 4.1%.

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