US Personal Income Rose 0.2% in August as Spending Surged
Consumer spending jumped 0.9% in August, far outpacing income growth, while the personal saving rate held at 4.1%.
American household income edged up 0.2% in August, climbing $66.6 billion, while consumer spending accelerated at a much faster clip, the U.S. Bureau of Economic Analysis reported. The divergence between the two figures signals that households drew down savings or increased borrowing to fund purchases during the month.
Disposable personal income — the amount left after current taxes are paid — rose $68.6 billion, or 0.3%, a slightly stronger gain than overall income growth, reflecting the net effect of tax obligations. Personal consumption expenditures, the Federal Reserve's preferred inflation benchmark, increased $190.8 billion, or 0.9%, a notably robust monthly advance.
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Personal outlays, a broader measure that combines consumer spending with interest payments and transfer payments, climbed $190.7 billion in August, closely tracking the PCE figure. The gap between spending growth and income growth illustrates the degree to which consumers remained willing to reach beyond their current paychecks.
The personal saving rate stood at 4.1% of disposable personal income, with total personal saving at $990.2 billion. A saving rate at that level leaves households with a limited buffer should economic conditions deteriorate, a dynamic that analysts and policymakers tend to watch closely when assessing consumer resilience.
Continue reading at U.S. Bureau of Economic Analysis.
