Consumer spending increased in August, even though wages did not show much improvement.
Spending increased 0.5% in the month, according to the Commerce Department report, up from a 0.4% increase in July. Spending by consumers accounts for nearly three-quarters of the nation's economic activity, so growth in spending an important driver of economic growth.
But for the second straight month personal income grew by only 0.1%, as the continued weakness in the jobs market has kept wages in check.
Some of the spending was paid for by a drop in the average amount saved by consumers. The savings rate fell to 3.7% of after-tax income, which means the typical worker saved only $3.70 out of every $100 of take-home pay.
Some of the increase in spending may have been driven by higher gasoline prices in the period, since non-durable goods accounted for the majority of the increase in spending. Gas prices jumped 9% in the month, according to a previous government reading. Excluding the rise in gas prices, spending by consumers crept up only 0.1% in the month.
|Five predictions for the World Wide Web that were way, way, way off|
|4.2 million have signed up for Obamacare as open enrollment nears close.|
|West prepares sanctions against Russia over Ukraine|
|Why casino workers hate Obamacare|
|Fannie Mae, Freddie Mac stock hit by proposal to close them|
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.35%||4.32%|
|15 yr fixed||3.38%||3.33%|
|30 yr refi||4.37%||4.33%|
|15 yr refi||3.37%||3.35%|
Today's featured rates: