Washington - US consumers boosted spending in August as wages rebounded from a decline in July, government data released Friday showed.
Consumer spending rose 0.3 percent in August, while personal income jumped 0.4 percent, the strongest month-on-month growth since February, the Commerce Department reported.
Both numbers were better than expected. Analysts had forecast a 0.2 percent rise in spending and a 0.3 percent rise in income.
Wages and salaries, the largest component of personal income, rose 0.4 percent in August after falling 0.3 percent in July.
The wage growth left Americans with more spending cash in their wallets. After-tax disposable income increased 0.5 percent in August after a 0.3 percent rise in July.
Inflation remained tame. The prices of goods and services paid by consumers edged up 0.1 percent in August, the same increase as in July.
Excluding food and energy, so-called core personal consumption expenditures prices rose 0.2 percent in August, double the rate in the prior month.
Year-over-year, core PCE prices were up 1.2 percent in August, slightly higher than in July, but still well below the Federal Reserve's 2.0 percent target for price stability.
The Fed has said any start to reducing its $85 billion a month bond purchases would depend on improving economic data.
Jim O'Sullivan, chief US economist at High Frequency Economics, said that further slowing in inflation “would be unwelcome”, but he pointed out there has been no further slowing since April.
“The data are unlikely to stop Fed officials from at least starting the tapering process in the next few months,” he said. - Sapa-AFP