Link Securities | The Department of Commerce reported that the personal consumption expenditure (PCE) index rose 0.3% in the US in August compared to July, a reading that was in line with the consensus of FactSet analysts. In August, goods prices rose 0.1% compared to the previous month (down 0.1% in July), while services prices rose 0.3% (up 0.3% in July). It should be noted that in August, food prices rose by 0.5%, after a 0.1% drop in the previous month, and energy goods and services prices rose by 0.8% (down 1.1% in July).
Year-on-year, the overall PCE rose by 2.7%, the highest rate in six months, from 2.6% in both July and June. The consensus among analysts was for a similar reading to the actual figure.
The core PCE, which excludes unprocessed food and energy prices from its calculation, rose by 0.2% in August (up 0.2% in July), a reading that was also in line with analysts’ expectations. Year-on-year, the core PCE rose by 2.9% in August, the same rate as in July. The reading was in line with the consensus forecast.
Meanwhile, also according to the Department of Commerce, personal income in the US rose by 0.4% in August compared to July, slightly higher than the 0.3% expected by FactSet consensus analysts. August thus becomes the third consecutive month in which personal income has increased month-on-month. The growth in the month was due to an increase in employee compensation (0.3%), both in wages (0.3%) and wage supplements (0.4%).
In turn, personal spending rose by 0.6% in August compared to July, slightly above the 0.5% expected by analysts. August saw the sharpest increase in personal spending in five months, prolonging US consumer resilience despite greater economic uncertainty and high financing costs. Spending on non-durable goods rebounded by 0.8%, while spending in the services sector increased by 0.5%. Meanwhile, consumption of durable goods rose by 0.8%.
