US personal spending and income data a little stronger in August
US data a little stronger this afternoon, but nothing surprising – all in-line with analyst estimates.
Personal spending growth up from 0.1 per cent to 0.3 per cent in August. Personal income is up even more, up 0.4 per cent from last month's 0.1 per cent. That's the biggest gain since March.
Paul Ashworth, chief US economist, Capital Economics:
It still appears that third-quarter real GDP growth will be between 2.0% and 2.5% annualised. The pick-up in income growth in August suggests that consumption growth may even accelerate in the fourth quarter.
Nominal wages and salaries increased by 0.4% m/m, which adds to the evidence that labour market conditions might be improving. As a result of the bigger gain in income, the saving rate actually ticked up to 4.6%, from 4.5%. There is also some early evidence that core inflation is rebounding on the PCE deflator measure. Admittedly, the annual PCE core inflation rate was still 1.2% last month, but the three-month annualised rate accelerated to 1.4%, and prices increased by 0.2% m/m.