US personal income and spending growth steady in August

Personal consumption and spending in the US continued growing at a steady pace last month.

According to the Department of Commerce, both personal income and spending printed at up by 0.3% month-on-month for August.

That was in comparison to economists' forecasts for increases of 0.4% and 0.3%, respectively.

The same report revealed that the 'core' price deflator for personal consumption expenditures, the Federal Reserve's preferred gauge of inflation pressures in the economy, printed at flat on the month (Barclays: 0.1%) and up by 2.0% in comparison to a year ago (Barclays: 1.9%).

In July, core PCE had advanced by 2.0% year-on-year.

The rate of headline PCE meanwhile dipped from 2.3% for July to 2.2% in August.

Commenting on the above data, Michael Pearce at Capital Economics said: "even if core inflation doesn't rise any further the continued strength of real consumption growth is reason enough for the Fed to continue raising interest rates once a quarter."