People count money at Macy’s Herald Square store during the early opening of the Black Friday sales in the Manhattan borough of New York, November 26, 2015. (Photo: Reuters)
The Bureau of Economic Analysis (BEA) said personal income and outlays gained in July, a strong sign for consumer spending, while inflation remained flat.
Personal income increased $65.6 billion (0.4%) and personal outlays increased $45.2 billion in July. Disposable personal income (DPI) increased $39.6 billion (0.3%) and personal consumption expenditures (PCE) increased $44.7 billion (0.3%).
Real DPI increased 0.2% in July and Real PCE increased 0.2%. The $29.3 billion increase in real PCE was made up of an increase of $18.7 billion in spending for goods and an $11.8 billion increase in spending for services.
Personal saving was $510.2 billion in July, while the personal saving rate–personal saving as a percentage of disposable personal income–came in at 3.5%. Consumer spending data are a real boon to gross domestic product (GDP), which the BEA reported Wednesday increased at a solid annual rate of 3.0% in the second quarter (2Q).
The Atlanta Federal Reserve’s GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the 3Q of 2017 is currently 3.4%. The next GDPNow update is Thursday, August 31.
But inflation remains a concern, or the lack of it. The PCE price index increased 0.1%. Excluding food and energy, the PCE price index increased 0.1%.
