- POSTED: 27 Sep 2013 22:14
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US consumers boosted spending in August as wages rebounded from a decline in July, government data released on Friday showed.
WASHINGTON: US consumers boosted spending in August as wages rebounded from a decline in July, government data released on Friday showed.
Consumer spending rose 0.3 per cent in August, while personal income jumped 0.4 per cent, the strongest month-on-month growth since February, the Commerce Department reported.
Both numbers were better than expected. Analysts had forecast a 0.2 per cent rise in spending and a 0.3 per cent rise in income.
Wages and salaries, the largest component of personal income, rose 0.4 per cent in August after falling 0.3 per cent in July.
The wage growth left Americans with more spending cash in their wallets. After-tax disposable income increased 0.5 per cent in August after a 0.3 per cent rise in July.
Inflation remained tame. The prices of goods and services paid by consumers edged up 0.1 per cent in August, the same increase as in July.
Excluding food and energy, so-called core personal consumption expenditures (PCE) prices rose 0.2 per cent in August, double the rate in the prior month.
Year-over-year, core PCE prices were up 1.2 per cent in August, slightly higher than in July, but still well below the Federal Reserve's 2.0 per cent target for price stability.
The Fed has said any start to reducing its US$85 billion a month bond purchases would depend on improving economic data.
Jim O'Sullivan, chief US economist at High Frequency Economics, said that further slowing in inflation "would be unwelcome", but he pointed out there has been no further slowing since April.
"The data are unlikely to stop Fed officials from at least starting the tapering process in the next few months," he said.