U.S. consumer spending rose in August, helped by rising incomes, the government reported Monday in a positive sign for the economy, whose growth appears to be accelerating.
The Commerce Department said consumer spending which accounts for 70 percent of U.S. economic activity rose 0.5 percent last month after being unchanged in July.
Personal income rose 0.3 percent in August following a 0.2 percent gain the previous month. Because spending outpaced income in August, the savings rate fell to 5.4 percent from 5.6 percent.
The data reinforces the view that the economy will finish this year strongly and that the Federal Reserve (Fed) could raise interest rates next year to keep inflation under control.
The Fed's preferred inflation gauge was up 1.5 percent in August from a year earlier, according to the Commerce Department report. The measure of underlying price pressures, which excludes volatile energy and food costs was steady at 1.5 percent but has been trending higher this year as the economy has strengthened. The Fed has a 2 percent inflation target.
Data Friday showed the U.S. economy grew at its fastest pace in nearly three years in the second quarter, with all sectors contributing the increase in output.© Copyright - Saudi Press Agency