American consumers curbed their spending in August despite a healthy income gain.
Personal incomes rose 0.6 percent last month, triple the 0.2 percent July gain, to a seasonally adjusted annual rate of $6.92 trillion, the Commerce Department said Monday.
Personal consumption expenditures increased 0.3 percent to a seasonally adjusted annual rate of $5.52 trillion. That followed a 1 percent spurt in July, the biggest in six months.
Economists said the income advance reflected solid gains in wages and hours worked and came despite the dampening effect of auto strikes. Wages and salaries - the most-watched component of personal income - rose 0.8 percent.
Farm owners income slipped in August but other categories rose, including non-farm business owners income, personal interest and dividend income, transfer payments such as welfare and Social Security and rental income.
Tax payments rose, so the increase in disposable personal income - income after taxes - was 0.5 percent, a bit less than the overall gain.
The slowdown in spending growth, meanwhile, reflected the leveling out of auto sales. Spending on big-ticket durable goods designed to last three or more years rose 0.3 percent after a big 3.2 percent jump in July. Spending on nondurable goods rose 0.2 percent and on services, 0.4 percent.
The combination of robust income growth and a moderate spending gain produced an increase in the nation’s savings rate - savings as a percentage of disposable personal income - to 3.8 percent in August from 3.6 percent in July, a six-month low.
Monday’s report was the last piece of economic data released before today’s meeting of Federal Reserve policy-makers. Almost all economists expect they’ll leave short-term interest rates unchanged. They last boosted them in March but have refrained since as inflation has diminished despite brisk economic growth.
The income and spending figures, in line with expectations, were not likely to upset economists’ and markets’ belief the Fed will hold steady at their session today.
The stock market moved higher Monday, pushing the Dow Jones average of industrial stocks up 69.25 points to 7,991.43, its highest close since Aug. 20.