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But the most critical factor that the Fed will weigh is the August employment report, which will be released next Friday. It's the final jobs report before the Fed meets. Another concern is that rising interest rates could dampen consumer spending, particularly on homes and cars. Mortgage rates have already risen more than a full percentage point since May. In July, the savings rate was unchanged at 4.4 percent of after-tax income. That was the smallest since the rate had been 4.3 percent in March. The small rise in spending was driven by a 0.8 percent gain in purchases of nondurable goods, such as clothing. Purchases of durable goods such as autos fell 0.2 percent and purchases of services such as utilities and doctor's visits were unchanged in July. A price gauge tied to consumer spending was up a small 0.1 percent in July compared to June. Prices excluding volatile food and energy are up just 1.4 percent compared to a year ago, significantly below the Federal Reserve's 2 percent target for inflation.
[Associated
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