(AURN News) — New data released Friday shows that in July, Americans saw a modest uptick in their wallets, according to the latest report from the U.S. Bureau of Economic Analysis (BEA). Personal income increased by $75.1 billion, or 0.3 percent, from the previous month. After taxes, the amount left for spending, known as disposable personal income (DPI), also rose by $54.8 billion, marking a similar 0.3 percent increase. Spending, however, outpaced income gains.
Personal consumption expenditures (PCE)—which include everything from groceries to rent—increased by $103.8 billion, or 0.5 percent. This boost in spending was driven largely by purchases of motor vehicles and parts, as well as everyday essentials like food and beverages. Despite the rise in spending, inflation remained steady.
The PCE price index, a key measure of inflation, inched up by just 0.2 percent in July. Even when volatile food and energy prices are excluded, the PCE price index held at the same 0.2 percent increase. These figures are particularly important for the Federal Reserve as it continues to monitor economic indicators in its ongoing battle against inflation. The steady inflation rate, coupled with rising spending, will likely influence the Fed’s decisions on interest rates in the coming months. The slight increase in real purchasing power offers a glimpse of optimism for the economy, which remains an important topic heading into November’s presidential election. The BEA will release its next update on September 27.
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