NEW YORK, Sept. 26 (Xinhua) -- The U.S. Federal Reserve's preferred inflation gauge rose in August from a year earlier, while consumer spending increased slightly more than expected, the Bureau of Economic Analysis (BEA) of the Commerce Department said Friday.
A BEA report suggested that Americans ramped up their spending in August. Personal Consumption Expenditures (PCE) price index grew 2.7 percent year on year in August, higher than a 2.6 percent growth in July.
However, their costs of living were on the rise as food and other goods became even more expensive last month and service prices remained stubbornly high. Core PCE price index, excluding volatile food and energy prices, grew 2.9 percent year on year in August, equal to the growth in the prior month. This so-called core inflation index is still higher than the 2 percent target set by the Federal Reserve.
The BEA said that PCE increased 0.6 percent in August, following an unrevised 0.5 percent advance in July. Personal income rose 0.4 percent, with a similar gain in July.
Meanwhile, Americans appeared to dip into their savings. Friday's report showed that the saving rate dropped to 4.6 percent from 4.8 percent in July, with real disposable personal income at only 0.1 percent after inflation.
The U.S. economy is showing resilience in the midst of substantial changes in trade and immigration policies, as well as in fiscal, regulatory and geopolitical arenas, Federal Reserve Chairman Jerome Powell has said.
Powell also said that the tariff-related effects on inflation will be relatively short-lived, calling it a one-time shift in the price level.
