Washington, DC, September 30--Personal income rose 0.4% in August, according to a Commerce Department reported issued Thursday. It was the largest increase since May.
Income had risen 0.2% in July -- up from an earlier estimate of 0.1% growth. Meanwhile, personal spending was flat. Consumption had jumped 1.1% in July -- the biggest increase since December 2002 and an upward revision from an earlier estimate of 0.8% growth.
At the same time, consumers tucked away more funds than they had in July. Personal saving as a percentage of disposable personal income was 0.9% in August, up from 0.5% in the prior month. Disposable personal income, or income after taxes, climbed 0.4% in August, following a 0.2% advance in July.
Spending on durable goods -- defined as manufactured products meant to last three years and longer -- fell 1.6% in August, after rising by a revised 6.2% in July. Nondurable goods spending rose 0.2% after a revised 0.3% gain. Spending on services grew 0.2% in August after a 0.5% rise in July.
The price of crude oil topped the $50-per-barrel mark earlier this week, a record in nominal terms and an important psychological benchmark. Many economists see surging oil prices as a major threat to economic expansion because the more consumers spend on energy, the less they have to spend on other goods and services. That was evident in August.
