WASHINGTON — Personal consumption expenditures rose 0.4% in July, outpacing a 0.2% hike in personal income, the Commerce Department said Monday.
Core PCE, which excludes food and energy costs, rose 0.1% for the month and was 1.4% higher than a year ago. Disposable personal income, excluding taxes, increased 0.2%.
Diane Swonk, chief economist at Mesirow Financial, indicated that detailed spending and income data was less reassuring than the headline numbers.
"A rise in vehicle sales accounted for some of the upside surprise," Swonk said. "The real mover, however, was spending on services, which surged as people turned up their air conditioning in what was recorded as the hottest July on record for the nation. This will no doubt curtail spending elsewhere in the economy, especially as those bills come due in August and September."
