Personal spending rose slightly more than expected in August, data out Friday showed.
The 0.8% MoM increase barely beat consensus, which was looking for 0.7% (figure below). The range, from more than five-dozen economists, was -1% to 1.5%.
The solid read on consumption comes two weeks after retail sales data for August suggested the US consumer wasn’t tapped out quite yet, even as spending in the services sector appeared to take a hit from the Delta wave.
A downward revision to July’s data showed spending decreased slightly.
Personal incomes rose 0.2%, down sharply from the previous month but matching expectations.
We’re starting to see the handoff from enhanced unemployment benefits to the child allowances. The government noted that Child Tax Credit advances were “partly offset by a decrease in unemployment insurance,” where that means fewer payments under the Pandemic Unemployment Compensation program.
Of course, the market’s focus is on inflation. PCE prices rose more than expected in August, up 0.4% MoM. Consensus was looking for a 0.3% increase. The YoY print was 4.3% (figure below).
Although a cooler-than-expected read on core CPI for August delivered an incremental win for team “transitory,” inflation concerns are rampant.
Core PCE prices rose 0.3% in August, Friday’s data showed. Like the headline print, that was slightly hotter than anticipated.
YoY, core prices rose 3.6% and remained stuck at a 30-year high for the third straight month.
