US Personal Income Rises 0.2% in August as Spending Surges 0.9%
Americans increased spending nearly five times faster than income growth in August, pushing the personal saving rate to 4.1 percent.
Personal income in the United States climbed $66.6 billion, or 0.2 percent, in August, while consumer spending accelerated at a far sharper pace, according to data released by the U.S. Bureau of Economic Analysis.
Personal consumption expenditures rose $190.8 billion, a 0.9 percent monthly gain that outpaced income growth by a wide margin. The divergence signals that households drew down savings or relied on credit to fund purchases during the month.
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Disposable personal income — income remaining after current taxes — increased $68.6 billion, or 0.3 percent, suggesting tax obligations had a modest dampening effect on take-home pay. Total personal outlays, which incorporate consumption, interest payments, and transfer payments, rose $190.7 billion, closely tracking the jump in consumer spending.
The personal saving rate stood at 4.1 percent of disposable income, with aggregate personal saving reaching $990.2 billion. A saving rate at that level reflects a household sector still allocating a meaningful share of income to savings, even as monthly spending growth significantly outstripped income gains.
The BEA's monthly personal income and outlays report serves as the source for the PCE price index, the Federal Reserve's preferred inflation gauge, making August's spending data a closely watched input for monetary policy deliberations. Continue reading at U.S. Bureau of Economic Analysis.
