U.S. Consumer Spending Soft in August
By Ben Leubsdorf and Sharon Nunn
WASHINGTON--Consumer spending was soft in August, while a key measure of U.S. inflation continued to show modest price growth across the economy.
Personal consumption expenditures, a broad measure of household outlays on everything from groceries to doctor visits, rose a seasonally adjusted 0.1% in August from a month earlier, the Commerce Department said Friday.
Personal income from sources like paychecks, investments and government benefits was up 0.2% in August.
Both readings matched expectations among economists surveyed by The Wall Street Journal.
Adjusted for inflation, consumer spending fell 0.1% in August from the prior month. That was the first decline in price-adjusted outlays since January.
Consumer spending accounts for more than two-thirds of total U.S. economic output, and a pickup in outlays helped boost overall growth this spring. But economists think the powerful hurricanes that hit the U.S. in August and September could depress economic activity during the third quarter, which ends Saturday. Growth would likely rebound in subsequent quarters as rebuilding efforts take shape.
As of Thursday, forecasting firm Macroeconomic Advisers projected a 2.7% annual growth rate for gross domestic product in the third quarter, down slightly from the second quarter's 3.1% GDP growth rate. The Federal Reserve Bank of Atlanta's GDPNow model this week predicted third-quarter growth at a more modest 2.1% rate.
The Commerce Department said the August figures for income and spending reflected Hurricane Harvey, which hit Texas and Louisiana in late August, but that the agency couldn't quantify the storm's effects.