Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious OutperformanceFind Stocks Now

U.S. personal spending flat; inflation moves closer to Fed target

Published 09/30/2016, 08:17 AM
Updated 09/30/2016, 08:17 AM
U.S. personal spending flat in August, core PCE prices in line

Investing.com –U.S. consumer spending was unchanged in August, missing expectations for a slight uptick, while the annual increase in core PCE prices rose closer to the Federal Reserve's (Fed) target, official data showed on Friday.

In a report, the Commerce Department said that personal spending was unchanged in August from the prior month, below expectations for a 0.1% rise, and compared to a gain of 0.4% in July, that was revised up from an initial 0.3% advance.

Consumer spending is the single biggest source of U.S. economic growth, accounting for as much as two-thirds of economic activity.

Personal income, meanwhile, rose by a seasonally adjusted 0.2% in August, in line with forecasts. That was after rising 0.4% a month earlier.

Real personal consumption unexpectedly slipped by a seasonally adjusted 0.1% last month, missing expectations for a 0.1% gain and compared to July’s 0.3% increase.

Meanwhile, the core PCE price index rose 0.2% last month, matching expectations and compared to July’s 0.3% advance.

The core PCE price index rose at an annualized rate of 1.7%, in line with forecasts. July’s 1.6% gain had held steady at that level since March.

The Federal Reserve uses core PCE as a tool to help determine whether to raise or lower interest rates, with the aim of keeping inflation at a rate of 2% or below.

Immediately following the report, EUR/USD was trading at 1.1165 from around 1.1161 ahead of the release of the data, GBP/USD was at 1.2990 compared to 1.2959 previously, while USD/JPY was at 101.18 from 101.34 earlier.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

The US dollar index, which tracks the greenback against a basket of six major rivals, was at 95.78, compared to 95.86 ahead of the report.

Meanwhile, U.S. stock futures pointed to a flat open. The blue-chip Dow futures gained 14 points, or 0.08%, the S&P 500 futures edged forward 2 points, or 0.10%, while the tech-heavy Nasdaq 100 futures inched up 3 points, or 0.03%.

Elsewhere, in the commodities market, gold futures traded at $1,328.40 a troy ounce, compared to $1,326.15 ahead of the data, while crude oil traded at $47.82 a barrel from $47.70 earlier.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.