July data: US consumer spending firm, inflation slows

WASHINGTON: US consumers spent at a solid pace in July while the key PCE index of inflation slowed, the Commerce Department reported on Monday.

Consumer spending rose by 0.3% from June, with the gain underpinned mainly by automobile purchases while spending on non-durable goods and services declined.

That followed 0.4% gain in June, suggesting the consumer side of economic growth was firm at the start of the third quarter.

The spending gain was underpinned by a 0.4% rise in personal income in July, solid for the month but year-on-year up a more modest 2.7%. Inflation was still weak. The personal consumption expenditures price index was flat for the month and up 0.8% year-on-year, slower than a month before.

With volatile food and fuel stripped out, PCE inflation - the Federal Reserve’s preferred measure of price pressures - was up 0.1%.

Published in The Express Tribune, August 30^th, 2016.

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