US Personal Spending Rises the Least in 6 Months

Personal spending in the United States rose 0.3 percent from a month earlier in August 2018, following a 0.4 percent advance in July and matching market expectations. It was the smallest increase in personal spending since February.
BEA | Joana Ferreira | 9/28/2018 12:53:14 PM
Personal consumption expenditures (PCE) rose by $46.4 billion, or 0.3 percent, in August, following a revised $62.7 billion advance, or 0.4 percent, in July. The slowdown was due to a drop in consumption of durable goods (-0.1 percent vs 0.5 percent in July), while spending growth was unchanged for both nondurables (at 0.5 percent) and services (at 0.4 percent).

Real PCE went up $28.7 billion, or 0.2 percent, reflecting an increase of $15.3 billion in spending for goods and a $14.3 billion increase in spending for services. Within goods, other nondurable goods was the leading contributor to the increase. Within services, the largest contributor to the increase was spending for health care.

Personal income grew $60.3 billion, or 0.3 percent, in August mainly driven by gains in wages and salaries, government social benefits to persons, and nonfarm proprietors’ income.

Personal outlays rose $47.1 billion in August. Personal saving was $1,032.3 billion in August and the personal saving rate, personal saving as a percentage of disposable personal income, was 6.6 percent.

Disposable personal income (DPI) increased $51.4 billion, or 0.3 percent, in August. Real DPI increased 0.2 percent.

The personal consumption expenditures (PCE) price index increased 0.1 percent month-over-month in August, the same pace as in July and below market expectations of 0.2 percent. Services inflation was unchanged at 0.2 percent while goods prices fell 0.1 percent (vs unchanged in July). Prices of durable goods went down 0.3 percent (vs 0.4 percent in July) while those of nondurable goods edged up 0.1 percent (vs -0.2 percent in July). Excluding food and energy, PCE prices were unchanged in August after a 0.2 percent gain in the previous month and also below market forecasts of 0.1 percent. On the year, the PCE price index rose 2.2 percent (vs 2.3 percent in July); and the core index increased 2 percent, the same as in July and matching the Federal Reserve's target.

US Personal Spending Rises the Least in 6 Months