Personal spending in the United States rose 0.6 percent from a month earlier in July 2019, following a 0.3 percent growth in June and beating market expectations of 0.5 percent. Meanwhile, the core PCE price index, the Fed's preferred inflation measure, rose 1.6 percent year-on-year, remaining below the central bank's 2 percent target.
Personal consumption expenditures (PCE) rose $93.1 billion, or 0.6 percent, in July, boosted by consumption of durables (0.6 percent vs 0.4 percent), nondurables (1.1 percent vs 0.3 percent), and services (0.5 percent vs 0.3 percent).
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Real PCE grew $56.9 billion, or 0.4 percent, mainly reflecting an increase of $36.4 billion in spending for goods and a $23.8 billion increase in spending for services. Within goods, recreational goods and vehicles was the leading contributor to the increase. Within services, the largest contributor to the increase was spending for household electricity and gas.
Personal outlays increased $96.4 billion in July. Personal saving was $1.27 trillion in July and the personal saving rate, personal saving as a percentage of disposable personal income, was 7.7 percent.
Personal income went up $23.9 billion, or 0.1 percent, in July, boosted by increases in compensation of employees and government social benefits to persons, which were partially offset by a decrease in personal interest income.
Disposable personal income (DPI) advanced $44.4 billion, or 0.3 percent. Real DPI increased 0.1 percent.
The personal consumption expenditure (PCE) price index increased 0.2 percent from a month earlier in July, after a 0.1 percent gain in June. Prices for services advanced 0.2 percent, the same pace as in the previous month. Meanwhile, cost of goods also rose 0.2 percent (vs -0.1 percent in June) as an increase in nondurable goods (0.5 percent vs -0.4 percent) offset a decline in durables (-0.4 percent vs 0.5 percent). Year-on-year, the PCE price index went up 1.4 percent (vs 1.3 percent in June) and the core index increased 1.6 percent, the same as in June and in line with consensus.