Washington, Sep 29 (IANS) US consumers’ personal income and spending continued rising in August, but the inflation rate remained muted, the Commerce Department said on Monday.
In August, personal income increased 0.3 percent following a 0.5 percent growth in July. Personal spending increased 0.4 percent, the same growth as in July, reported Xinhua.
Personal saving rate went down to 4.6 percent in August from July’s 4.7 percent, indicating consumers might gain confidence in spending more while saving less.
The price index for the personal consumption expenditure (PCE), a gauge for the inflation level preferred by the Federal Reserve, increased 0.3 percent year on year, the same as in July.
The core PCE price index, excluding volatile food and energy, increased 1.3 percent from a year ago, slightly higher than the 1. 2 percent increase in July.
Both the headline and core PCE index have been below the central bank’s 2 percent target for years.
Fed Chair Janet Yellen has said the recent drop in oil prices and the further appreciation of US dollar have put some downward pressure in the near-term on inflation, which means that it will take a bit more time for these transitory effects to fully dissipate.
But she stressed, if the economic growth continues to be strong enough to support the achievement of maximum employment and the long-run inflation expectation remain well anchored, she expected the inflation will return to 2 percent over the next few years as the temporary factors wane.