U.S. Income, Spending Hike in August

Another sign things are returning to normality south of the border. Personal income in the U.S. rose slightly in August coming below market estimates.

But, figures released Friday morning by the Bureau of Economic Analysis Friday showed personal spending showed a strong increase beating expectations.

In August, personal income increased $35.5 billion, or 0.2%, from the previous month, while personal spending jumped $130.5 billion, or 0.8%.

Market expectations for personal income were for an increase of 0.3% in August, while it soared 1.1% in July. Market estimate for personal spending was an increase of 0.6% in August, while it fell 0.1% in July.

The personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation indicator, increased 0.4% in August. Core PCE index, excluding food and energy, rose 0.3% from the previous month. Year-on-year, they were up 4.3% and 3.6%, respectively.

The Fed has repeatedly said in recent months it will allow inflation to climb slightly above its 2% target to revive American economy from the pandemic until raising interest rates, but inflation has soared recently.