Consumer spending bounces higher in August

Consumer spending bounces higher in August

Consumer spending rose in August at the third fastest pace of the year and spending was also higher than initially reported in July, the Commerce Department said Friday. Spending climbed 0.3% last month on a seasonally adjusted basis, matching the forecast of economists polled by MarketWatch. And spending was revised up in July to show a 0.2% increase instead of 0.1%. The bounceback in spending could generate faster growth in the third quarter than economists had been expecting. Gross domestic product is forecast to rise 1.9%, down from 2.5% in the second quarter, according to the latest estimates. Personal income, meanwhile, rose 0.4% in August, the biggest increase in six months. Economists surveyed by MarketWatch had forecast a 0.3% gain in personal income. Since incomes increased faster than spending, the personal savings rate rose a tick to 4.6%. Also, inflation as gauged by the core PCE price index increased 0.1% in August, or a slightly faster 0.2% on a core basis. Both PCE indexes have risen a scant 1.2% over the past 12 months, indicating that inflation remains contained