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The Commerce Department said on Monday consumer
spending rose 0.5 percent last month after being unchanged in
July. The growth in August was just above the median forecast in
a Reuters poll of a 0.4 percent gain.
Spending was 0.5 percent higher even after adjusting for
inflation. Some of the strength in spending came from a decrease
in the personal saving rate, which slipped to 5.4 percent from
5.6 percent.
Personal income rose 0.3 percent following a 0.2 percent rise
the month before, in line with forecasts.
The data reinforces the view that the U.S. economy will finish
this year firing on nearly all cylinders and that the U.S.
Federal Reserve could raise interest rates next year to keep
inflation in check.
The Fed's preferred gauge of inflation was up 1.5 percent in
August from a year earlier, according to the Commerce Department
report. That was down slightly from a month earlier. A measure
of underlying price pressures which strips out food and energy
held at 1.5 percent and has been trending higher this year as
the economy has strengthened. The Fed has a 2 percent inflation
target.
Data on Friday showed the U.S. economy grew at its fastest pace
in 2-1/2 years in the second quarter with all sectors
contributing to the jump in output.
(Reporting by Jason Lange; Editing by Andrea Ricci)
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