Personal Income up 0.2%; Core PCE Increases 0.1%
WASHINGTON -- Personal income rose 0.2% in August, as expected, while a weaker-than-expected 0.1% rise in the core PCE price index cut the year/year rate for core inflation growth to 1.3% from 1.4% in July, data released by the Commerce Department Friday morning showed.
The year/year rate of growth for August core PCE prices was the lowest since November 2015 and suggests little movement in underlying rate of inflation as analysts debate the FOMC’s possible rate hike in December.
Nominal PCE was up 0.1% in August, as expected. Durable goods spending fell by 1.1%, cut down by weak vehicle sales. Nondurable goods spending rose 0.3%, as did services spending.
For income, there were gains were reported for all the major categories, but wages and salaries were flat in the month due to soft payrolls and earnings and a drop in hours worked.
Disposable personal income rose 0.1% in the month, while real disposable income fell 0.1%. The saving rate held steady at 3.6% in August.
The overall PCE price index was up 0.2% in August following a 0.1% gain in July. However, the year/year pace remained at 1.4% for the third straight month.
Real PCE was down 0.1% in August following a 0.2% increase in July. After inflation adjustment, durable goods PCE fell 1.0% and nondurable goods PCE declined 0.2%, while services PCE was up 0.1%.
Through two months, real PCE was up 1.4% at an annual rate from the second quarter average