US Personal Income Rose 0.2% in August as Spending Surged 0.9%
Americans spent far more than they earned in August, pushing the personal saving rate to 4.1%, BEA data show.
Personal income in the United States climbed $66.6 billion, or 0.2 percent, in August, while consumer spending accelerated at a much faster pace, according to data released by the U.S. Bureau of Economic Analysis.
Personal consumption expenditures jumped $190.8 billion, a 0.9 percent monthly gain, far outpacing income growth and signaling robust consumer demand heading into the fall. Total personal outlays — which include spending, interest payments, and transfer payments — rose a corresponding $190.7 billion for the month.
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Disposable personal income, which strips out current taxes, increased $68.6 billion, or 0.3 percent, providing households slightly more after-tax purchasing power than gross income growth alone would suggest. The gap between income gains and spending growth, however, indicates consumers drew on savings or credit to fund the spending surge.
Personal saving stood at $990.2 billion in August, with the personal saving rate — saving as a share of disposable income — registering 4.1 percent. A saving rate at that level reflects a household sector that is spending at a brisk clip relative to what it is taking in, a dynamic that can sustain near-term growth but may limit financial buffers if economic conditions shift.
Continue reading at U.S. Bureau of Economic Analysis.
