WASHINGTON — Nominal PCE rose 0.3% in August, below the 0.4% increase expected, while core PCE prices were flat on the month, keeping the year/year rate at 2.0% after rounding, according to data released by the Bureau of Economic Analysis Friday morning.
The 2.0% year/year rate for core PCE prices remains at the Fed's inflation target for the fourth month in a row after June's gain was revised upward to 2.0%.
The 0.3% gain in current dollar PCE, below expectations, followed no revision to the July number at 0.4%, though it was close to being rounded up to 0.5%. Spending on durable goods was down 0.1% in the month, while nondurable goods spending rose 0.5% because of a 1.9% increase in energy prices. Services spending was up 0.4%.
Real PCE was up 0.2% in August, as the overall PCE price index was up only 0.1% despite the increase in energy prices. The overall PCE price index was up 2.2% year/year, down from 2.3% in July.
After inflation adjustment, durable goods PCE rose 0.2%, while real nondurable goods PCE was up 0.4% and real services PCE was up 0.2%.
An MNI calculation shows that real PCE in August was up 3.1% at an annual rate from the second quarter average, and was up 3.7% after an adjustment for only having two months of data. This was below the 3.8% PCE pace in the second quarter reported on Thursday.
Personal income growth was boosted by a 0.5% increase in wages and salaries, as well as gains in most other income categories.
The saving rate was unchanged in August at 6.6%, the same as in July after revisions. The July and August saving rates were below the 6.8% rate reported for the second quarter.
Personal taxes rose by 0.4% in the month after a 0.3% increase in July. Disposable personal income rose by 0.3% after a 0.3% in July. Real disposable income was up 0.2%, the same pace as in July.
