WASHINGTON -- After a weak July, while inflation remained flat, U.S. consumer spending and personal income picked up pace in August, the Commerce Department reported Monday.
Consumer spending, the main engine of the economy, rose 0.5% in August after no change in July, revised from a 0.1% decline.
Driving the increase was spending on durable goods, up 1.9% in August on a surge in auto sales, following a 0.1% rise the prior month.
"We have to expect a correction in September auto sales, so we look for real consumption to drop by about 0.2%," said Ian Shepherdson of Pantheon Macroeconomics.
Personal income increased 0.3%, a tenth point more than July's slowest growth of the year. Wages and salaries gained 0.4%, double the July rise.
The savings rate dipped to 5.4% from 5.6%.
"Without a sizable acceleration in income growth, sustainable consumption growth will be difficult," said Briefing.com.
Inflation remained tame and well below the Federal Reserve's longer term 2% target. The personal consumption expenditures price index, the Fed's preferred measure, fell to an annual rate of 1.5% from 1.6% in July.
Stripping out volatile food and energy prices, the core PCE price index was unchanged at 1.5% for the fourth month in a row.
Copyright Agence France-Presse, 2014
