U.S. personal income and spending likely remained flat in July, labor market to pressure businesses to raise wages

U.S. personal income and spending data for the month of July is set to release tomorrow. In the prior month, both personal income and personal spending rose 0.4 percent. June income and spending data was the first opportunity to analyse how the benchmark revisions – which took effect with the second quarter GDP results – have changed the data, noted Wells Fargo in a research report.

Incomes seem to have risen more strongly in earlier years than previously reported, while consumption rose slightly less. These dynamics resulted in a boost to the saving rate to 6.7 percent in 2017, more than twice as high as earlier reported.

Consumers seem to be in a better financial position than previously thought, as the revisions to the personal income data show a slightly brighter economic picture. With wages and salaries having firmed, the trend now more closely tracks the solid job growth seen in the first half of 2018.

“The tightening labor market will continue to pressure businesses to raise wages. Continued wage gains should be supportive of solid gains in consumer spending throughout the second half of the year”, stated Wells Fargo.

At 13:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -52.4483. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex