Personal Income Rises for August, Spending Not So Much

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The Bureau of Economic Analysis (BEA) has released its reading for personal income and spending for the month of August. Personal income increased by $39.3 billion, or by 0.2%, and spending was flat at 0.0% in August. Bloomberg had the consensus estimates at 0.2% for both personal income and consumer spending.

Before getting too upset about spending being flat and under expectations, we should consider that August was a month in which some holes already were appearing on the retail spending front. That was even the case for casual dining.

The BEA also reported that disposable personal income increased by $31.9 billion, or 0.2%, and personal consumption expenditures increased by $6.2 billion, less than a 0.1% gain.

Real disposable personal income increased 0.1% in August and real personal consumption expenditures decreased 0.1%. The personal consumption expenditures price index increased by just 0.1%, while the core personal consumption expenditures price index (excluding food and energy) increased by 0.2%.

Other data for August released from the BEA were as follows:

  • The increase in personal income in August primarily reflected increases in compensation of employees, personal income receipts on assets and government social benefits.
  • The decrease in real PCE in August primarily reflected a decrease in spending for durable goods that was partially offset by an increase in spending for services.
  • Personal saving was $807.6 billion in August and the personal saving rate, personal saving as a percentage of disposable personal income, was 5.7%.