Financial News: U.S. Consumer Price Growth Matches Estimates In August

U.S. Consumer Price Growth Matches Estimates In August

(RTTNews) - The Commerce Department released a report on Friday showing consumer prices in the U.S. increased in line with economist estimates in the month of August.

The report said the personal consumption expenditures (PCE) price index climbed by 0.3 percent in August after rising by 0.2 percent in July. The price growth matched expectations.

Prices for services rose by 0.3 percent for the second consecutive month, while prices for goods crept up by 0.1 percent in August after edging down by 0.1 percent in July.

The annual rate of growth by the PCE price index ticked up to 2.7 percent in August from 2.6 percent in July, which was also in line with estimates.

Excluding food and energy prices, the core PCE price index rose by 0.2 percent in August, matching a revised increase in July as well as expectations.

The annual rate of growth by the core PCE price index came in at 2.9 percent in August, unchanged from July an in line with estimates.

"The PCE price indexes show inflation creeping higher as tariffs push up a range of goods prices," said Michael Pearce, Deputy Chief US Economist at Oxford Economics.

He added, "We estimate around two thirds of the burden of tariffs have been passed through to consumers, though the range of new sectoral tariffs announced overnight mean further price pressures are likely on the way."

The Federal Reserve's preferred readings on consumer price inflation were included in the Commerce Department's report on personal income and spending.

The report said personal income climbed by 0.4 percent in August, matching the increase seen in July. Economists had expected income to rise by 0.3 percent.

Disposable personal income, or personal income less personal current taxes, also increased by 0.4 percent for the second straight month.

Meanwhile, the Commerce Department said personal spending grew by 0.6 percent in August after rising by 0.5 percent in July. Economists had expected spending to rise by another 0.5 percent.

Excluding price changes, real personal spending climbed by 0.4 percent in August, matching the increase seen in the previous month.

"Consumer spending rose a touch more than anticipated in August, and combined with upward revisions to past months, spending has rebounded vigorously from the sharp slowdown seen in the spring," said Pearce.

With sending rising by slightly more than income, personal saving as a percentage of disposable personal income slipped to 4.6 percent in August from 4.8 percent in July.

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