Fewer auto sales dent consumer spending in August, inflation still weak, PCE shows

• September 29, 2017
• realestate
• Announcements, Business & Markets, Real Estate, Real Estate Finance

Consumer spending rose 0.1% in August. If adjusted for inflation, however, spending fell for the first time since January.
Personal income climbed 0.2%, above the 0.1% forecast. The savings rate was flat at 3.6%.

The PCE index, the Federal Reserve’s preferred inflation gauge, increased 0.1% in August. The closely followed “core” rate that strips out food and energy edged up 0.1%. Neither index rose on a yearly basis.

The most important takeaway is that inflation remains stubbornly low. The Fed plans to raise interest one more time in 2017 and three times in 2018, but the bank might have to reconsider unless inflation tracks higher again.