Consumer Spending Accelerated in August
Washington, DC, October 1, 2021- Personal income increased $35.5 billion (0.2%) in August, according to estimates released by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $18.9 billion (0.1%), and personal consumption expenditures (PCE) increased $130.5 billion (0.8%).
Real DPI decreased 0.3% in August, and Real PCE increased 0.4%; goods increased 0.6% and services increased 0.3%. The PCE price index increased 0.4%. Excluding food and energy, the PCE price index increased 0.3%.
Consumer spending picked up in August, a sign the U.S. economic recovery is gaining steam heading into the fall, reports the Wall Street Journal.
“Personal outlays on goods and services rose 0.8% in August from the month before, after a 0.1% decrease in July, the Commerce Department reported Friday.
“Personal income increased 0.2% in August. The federal government’s distribution of enhanced tax breaks for parents had helped push up income by 1.1% in July.
“The highly contagious Delta variant of the coronavirus triggered a summer slowdown in spending on meals out, hotels and airline tickets. Still, consumers remain in a strong position to help power the economic recovery. They have accumulated high levels of savings and are benefiting from an abundance of job openings and rising wages.
“‘Households have the wherewithal to spend,’ said Joe Brusuelas, chief economist at RSM US LLP. ‘Demand should remain robust over the next two to three years as growth continues well above the long-term trend.’
“Mr. Brusuelas said that in the near term, supply bottlenecks could create some bumps. “Constraints such as backups at U.S. ports and overseas manufacturing disruptions have persisted. The global chip shortage has slammed the auto sector this year, cutting factory output by several million vehicles. The Federal Reserve and economists expect these disruptions to eventually ease.”