American consumers stepped up their spending in August in another sign of strong economic recovery in the United States, but the housing sector remained weak, Reuters reported on Tuesday.
Consumer spending rose 0.5 percent last month after being unchanged in July, the Commerce Department said. The growth in August was just above the median forecast in a Reuters poll of economists.
Even after adjusting for inflation, spending was up 0.5 percent, the biggest gain since March. Personal income inched up 0.3 percent, in line with forecasts.
However, contracts to purchase previously owned homes fell 1.0 percent, the National Association of Realtors said.
Most investors are betting the Federal Reserve will raise interest rates next year to keep inflation in check, although Monday’s data gave little sign of growing price pressures, according to the news agency.
The Fed’s preferred gauge of inflation was up 1.5 percent in August from a year earlier, down slightly from the reading in July, data from the Commerce Department data showed. A measure of underlying price pressures which strips out food and energy held at 1.5 percent. That reading had dipped to 1.2 percent earlier this year.
Some policymakers at the US central bank remain concerned that inflation is still well below their 2 percent target, the report said.
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