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Home>UPDATE: Fewer auto sales dent consumer spending in August, inflation still weak, PCE shows

UPDATE: Fewer auto sales dent consumer spending in August, inflation still weak, PCE shows

UPDATE: Fewer auto sales dent consumer spending in August, inflation still weak, PCE shows

09/29/2017

By Jeffry Bartash, MarketWatch

Consumer spending up 0.1%, core inflation lowest since 2015

The numbers:Consumer spending rose just 0.1% in August (https://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm) after a 0.3% gain in the prior month. That matched the Marketwatch forecast. If adjusted for inflation, however, spending fell for the first time since January.

Personal income climbed 0.2%, above the 0.1% forecast. The savings rate was flat at 3.6%.

The PCE index, the Federal Reserve's preferred inflation gauge, increased 0.1% in August. The closely followed "core" rate that strips out food and energy edged up 0.1%. Neither index rose on a yearly basis.

What happened: Consumer spending slowed in August largely because of fewer sales of new cars and trucks. Auto sales dropped 1.8% last month. Hurricane Harvey may have also been a drag on the economy.

(http://projects.marketwatch.com/economic-data/?series=PCEPILFE_pc1&theme=white&hed=Core+PCE+price+index&dek=Change+from+previous+year%2C+seasonally+adjusted&source=Commerce+Department+via+FRED&source_link=http%3A%2F%2Fwww.bea.gov%2Fnewsreleases%2Frels.htm&drad=on&start=2010-09-01&end=2017-09-01&predictions=none)

Inflation remained subdued. The 12-month rate of PCE inflation was unchanged at 1.4%. The core rate fell a tick to 1.3% -- the lowest level since November 2015.

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