After reporting a sharp increase in U.S. personal income in the previous month, the Commerce Department released a report on Friday showing personal income edged up by slightly less than expected in the month of August.
The Commerce Department said personal spending crept up by 0.2 percent in August after jumping by 1.1 percent in July. Economists had expected income to rise by 0.3 percent.
Disposable personal income, or personal income less personal current taxes, also inched up by 0.1 percent in August after surging by 1.1 percent in the previous month.
The uptick in personal income primarily reflected increases in employee compensation and government benefits, although advance Child Tax Credit payments were partly offset by a decrease in unemployment insurance.
Meanwhile, the report said personal spending climbed by 0.8 percent in August following a revised 0.1 percent dip in July.
Spending was expected to increase by 0.6 percent compared to the 0.3 percent uptick originally reported for the previous month.
Excluding price changes, personal spending rose by a more modest 0.4 percent in August after falling by 0.5 percent in July.
Paul Ashworth, Chief U.S. Economist at Capital Economics, noted the level of real consumption is basically unchanged since the post-stimulus check peak in April.
“Services spending has continued to rebound, as high contact services businesses have fully reopened, but that has been largely offset by a drop back in goods consumption,” Ashworth said.
He added, “The latter is due to the extent of the decline in motor vehicle consumption, which reflects the lack of inventory amid a global supply shortage, with the impact of the fading fiscal boost less of a factor.”
With income rising by less than spending, personal saving as a percentage of disposable income dropped to 9.4 percent in August from 10.1 percent in July.
A reading on inflation said to be preferred by the Federal Reserve showed the annual rate of core consumer price growth in August was unchanged from the previous month at 3.6 percent.