WASHINGTON (MNI) - The U.S. August Personal Income report implies another decent but not-too-fast quarter of economic growth when the Q3 GDP information is compiled.
August personal income posted +0.4% in its best showing since February, personal consumption expenditures posted +0.3%, and core PCE prices posted +0.2% for +1.2% over the year. These were all about as expected.
Real PCE was up 0.2% after +0.1% for July, so Q3 consumption is growing at about +1.5% SAAR. This is comparable to the +1.8% in Q2 and will support decent GDP growth. A wage rebound supported spending, with autos heavily in demand. (July income was revised higher but spending down.)
Private wages were up $28.5 billion in August in a rebound from -$10.9 billion in July. Manufacturing and services pay jumped.
Supplements, proprietors' income, rents, and transfers were higher. Income on assets was down $4.5 billion, with both interest and dividends both down without explanation.
Savings edged up to $580.7 billion, the highest since December, putting the savings rate at 4.6%, its best since May. The savings rate has been above 4% since February, an indication that the U.S. is able to finance more of its borrowing.
August real spending was firm on durables, led by auto sales, and rebounded in services. August weakness stemmed from -$5.5 billion on nondurables as the mild summer weather in many states probably diminished spending on utilities.