Inflation pressures remained tame in July, Consumer Spending rose in July, Jobs report for August
August 29, 2016
Monday – August 29
Inflation pressures remained tame in July, despite an uptick in consumer spending. The Core Personal Consumption Expenditures (PCE) rose 0.1% from June to July, which was in line with expectations. The Core PCE on an annual basis rose 1.6%, matching the June number. The Core PCE measures the prices paid by consumer for goods and services, excluding food and energy and is the Federal Reserve’s favorite inflation gauge.
Consumer spending rose in July due to strong demand for automobile’s, which could signal a pickup in economic growth in the near future. The Commerce Department reported that Personal Spending rose 0.3% in July, which was in line with expectations. Consumer Spending is being driven higher due in part to an improving job market, higher home prices and a rising Stock market.
The closely watched Jobs Report for August will be released this coming Friday morning at 8:30 a.m. ET and will be closely watched by investors and traders around the globe for continued signs of a strengthening labor market. In addition, the members of the Federal Reserve will also be dissecting the report in its decision on interest rate movement at the Fed meeting on September 20-21. It is expected that employers added 180,000 new workers in August, below the blowout 292,000 created in July.