U.S. personal income and spending rose less than expected in August

Personal income increased by 0.2% month over month In August, which was less than the 0.4% market forecast and less than the 0.3% growth in July. For the third consecutive month, real personal disposable income increased by just 0.1% after deducting taxes and inflation.

In August, personal consumption expenditures increased by 0.2% as well, less than the 0.5% growth in July and the 0.3% predicted growth. Real spending increased by 0.1%, mostly due to a 0.2% rise in services, while spending on goods stayed unchanged.

In terms of inflation, core PCE inflation increased somewhat from 2.6% to 2.7% as a result of the core PCE price deflator rising by 0.1% m/m, down from 0.2% the previous month.

The monthly result was little below expectations, even though the annual amount was as expected. From 4.9% in July to 4.8% in August, the personal savings rate declined.