The higher incomes and increase in spending of American consumers are indications that the U.S. economy looks like moving to the right track. All of this happened in August following the steady numbers for June and July.
On Monday, the Commerce Department said that there was an increase of 0.5% spending in August compared to June’s data which remained as it is in July. It looks like the consumers had more confidence to spend a little bit extra of what they’re used to. This increase happened even with the adjustment for inflation. One of the contributors to the spending strength is the lesser personal saving rate, which went down from 5.6% to 5.4%.
As per the personal income part is concerned, it increased a 0.1% (0.2% to 0.3%) compared to July.
If everything stays the same just like what happened in August, continuous consumer spending and increase in personal incomes, experts view that the U.S. economy will end the year great and it’s possible that the U.S. Federal Reserve to increase interest rates in 2015 in order to keep inflation in check so as to meet its inflation target of 2%.
Last Friday’s data indicated that the U.S. economy is growing fast, it’s fastest in almost 2 years now specifically in the 2nd quarter of the year. Thanks to all the sectors that constantly worked have to contribute to the jump in output.
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