US in­fla­tion stays low as spend­ing cools

The Myanmar Times - - International Business -

US in­fla­tion picked up slightly in Au­gust but con­sumer spend­ing and in­come growth cooled, sug­gest­ing eco­nomic growth re­mained tepid.

The fresh data will sup­ply lit­tle added sup­port for the Fed­eral Re­serve’s plan to tighten mon­e­tary pol­icy with higher in­ter­est rates be­fore the end of the year, but should not weaken the ar­gu­ment ei­ther, ac­cord­ing to an­a­lysts.

Con­sumer spend­ing was flat for the month af­ter ris­ing an aver­age of 0.4 per­cent each month for the May-July pe­riod, mainly due to a long-ex­pected slow­down in au­to­mo­bile pur­chases.

The slow­down “was al­ways likely once the au­tomak­ers re­ported the sharp cor­rec­tion in sales, fol­low­ing their un­sus­tain­able strength in July,” said econ­o­mist Ian Shep­herd­son, who pre­dicted a pickup in Septem­ber’s data.

An­other rea­son is that US house­holds have boosted their sav­ings – a short-term damper on eco­nomic ac­tiv­ity but a de­vel­op­ment which points to longer-term sus­tain­abil­ity.

Per­sonal in­come gained US$39.3 bil­lion in Au­gust, an in­crease of 0.2pc over July. -

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