(Reuters) – U.S. consumer spending growth picked up in July, but stagnant inflation over the same period supports the Fed’s dovish interest rate assumption (Fed) in September.
Data released Thursday by the Commerce Department show that consumer spending in the United States, which accounts for more than two-thirds of the country’s economic activity, rose in July by 0.8% in adjusted data.
Economists polled by Reuters on average expected a rise of 0.7%.
The June statistic has been revised upwards to 0.6%, instead of the 0.5% initially announced.
Consumption was boosted by spending on goods and services. The slowdown in inflation, the good health of the labor market and the high level of wages are helping to support consumer spending and the economy.
The PCE consumer price index rose 0.2% in July over one month, an increase identical to that of June. Its rise over one year stands at 3.3% after 3% in June.
The core PCE inflation index, closely watched by the Federal Reserve and which excludes the volatile elements of energy and food, rose 0.2%. Over one year, its increase was 4.2%, against 4.1% a month earlier.
Economists polled by Reuters on average expected an increase of 0.2% over one month and 4.2% over one year.
(Report Lucia Mutikani, French version Diana Mandiá, edited by Claude Chendjou)
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