U.S. Consumer Spending Accelerates, Inflation Slows

U.S. consumer spending increased by the most in six months in July, while monthly inflation rates slowed, the government reported Thursday, supporting expectations the U.S. central bank would keep interest rates unchanged next month.

The U.S. Commerce Department said consumer spending, which accounts for about 70 percent of U.S. economic activity, increased 0.8 percent last month. Data for June was revised slightly higher to a 0.6 percent advance.

The report suggested the economy increased momentum early in the third quarter. Consumer spending is being supported by a tight labor market. Spending on goods rose 0.7 percent in July, while spending on services increased 0.8 percent.

Elsewhere in the report, inflation, as measured by the personal consumption expenditures (PCE) price index, climbed 0.2 percent last month, matching June’s gain. Food prices advanced 0.2 percent, and energy added 0.1 percent. In the 12 months through July, the PCE price index increased 3.3 percent, up from a 3 percent annual advance in June.

Source: Saudi Press Agency