Personal income and spending in the U.S. rose in line with economist estimates in the month of July, according to a report released by the Commerce Department on Monday.
The Commerce Department said personal income climbed by 0.4 percent in July after rising by 0.3 percent in June. The increase in income matched economist estimates.
Disposable personal income, or personal income less personal current taxes, also increased by 0.4 percent in July after climbing by 0.3 percent in the previous month.
The report also said personal spending rose by 0.3 percent in July following a 0.5 percent increase in June. The spending growth also met expectations.
Real spending, which is adjusted to remove price changes, also climbed by 0.3 percent in July after rising by 0.4 percent in June.
"The rise in real consumption was principally due to a 1.9% m/m rise in durable goods spending," said Steve Murphy, U.S. economist at Capital Economics. "This isn't entirely surprising given that we already knew from auto manufacturers' that unit vehicle sales rebounded sharply in July."
With income increasing by slightly more than spending, personal saving as a percentage of disposable personal income ticked up to 5.7 percent in July from 5.5 percent in the previous month.
The Commerce Department also said its personal consumption expenditures price index was unchanged in July after inching up by 0.1 percent in June. The annual rate of growth slowed to 0.8 percent from 0.9 percent.
Core PCE prices, which exclude food and energy prices, edged up by 0.1 percent for the second straight month, while the annual rate of growth held at 1.6 percent.
"That lack of acceleration in core inflation is a factor that could persuade Fed officials to delay the next interest rate hike until December," Murphy said.
by RTT Staff Writer
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