Washington: US consumer spending and personal income picked up pace in August after a weak July, while inflation remained flat, the Commerce Department reported on Monday.
Consumer spending, the main engine of the US economy, rose 0.5 percent in August after no change in July, revised from a 0.1 percent decline.
Driving the increase was spending on durable goods, up 1.9 percent in August on a surge in auto sales, following a 0.1 percent 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 percent," said Ian Shepherdson of Pantheon Macroeconomics.
Personal income increased 0.3 percent, a tenth point more than July`s slowest growth of the year. Wages and salaries gained 0.4 percent, double the July rise.
The savings rate dipped to 5.4 percent from 5.6 percent.
"Without a sizable acceleration in income growth, sustainable consumption growth will be difficult," said Briefing.com in a research note.
Inflation remained tame and well below the Federal Reserve`s longer term 2.0 percent target. The personal consumption expenditures price index, the Fed`s preferred measure, fell to an annual rate of 1.5 percent from 1.6 percent in July.
Stripping out volatile food and energy prices, the core PCE price index was unchanged at 1.5 percent for the fourth month in a row.
