Personal Income up 0.2%, Consumption Rises 1.3%

Personal income rose 0.2% in August, after rising 0.2% in July.  Personal consumption expenditures climbed 1.3%, versus a 0.3% increment in July.  Most of August’s strength was due to increased durable goods purchases (+5.3) stemming from the residual effect from the US government’s Cash for Clunkers program.  Nevertheless, the consumption of services reached an 11 month high, but with a modest gain of only 0.4%.  August’s PCE price index remained relatively constrained with the headline PCE rising 0.3%, and the core PCE showing a 0.1% gain, both when annualized still well within the Fed’s comfort zone.