U.S. personal income and spending both rose in line with economist estimates in the month of August, according to a report released by the Commerce Department on Friday.
The Commerce Department said personal income edged up by 0.2 percent in August after rising by a downwardly revised 0.3 percent in July.
Economists had expected income to rise by 0.2 percent compared to the 0.4 percent increase originally reported for the previous month.
Disposable personal income, or personal income less personal current taxes, crept up by a more modest 0.1 percent in August after rising by 0.2 percent in July.
The report said personal spending also inched up by 0.1 percent in August after climbing by an unrevised 0.3 percent in July. The uptick in spending matched expectations.
Meanwhile, real spending, which is adjusted to remove price changes, edged down by 0.1 percent in August after increasing by 0.2 percent in July.
Paul Ashworth, Chief U.S. Economist at Capital Economics, said the drop in real consumption in August was largely as expected given the already reported weakness in retail sales.
"That weakness was, at least in part, due to the impact of Hurricane Harvey toward the end of the month, however, which suggests a rebound at some point," Ashworth said.
He added, "Admittedly, with Irma hitting earlier this month, the September spending figures could remain depressed, but preliminary estimates suggest that motor vehicle sales have already rebounded sharply."
With income and spending both rising, personal saving as a percentage of disposable personal income in August was unchanged from the previous month at 3.6 percent.
A reading on inflation said to be preferred by the Federal Reserve showed the annual rate of core consumer price growth slowed to 1.3 percent in August from 1.4 percent in July.
by RTT Staff Writer
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