The Bureau of Economic Analysis said that personal income and personal spending both rose by 0.1 percent in July. In each case, that was the slowest pace since April, and both were below consensus expectations. In terms of a longer trend, personal income has grown 3.3 percent over the past 12 months, with personal spending up 3.1 percent year-over-year.
Overall wages and salaries were off 0.3 percent for the month, with manufacturing compensation also lower. Wages and salaries in the manufacturing sector were down from $752.7 billion in June to $749.0 billion in July. Still, year-to-date growth has been positive, with wages and salaries up from $736.1 billion in January.
Meanwhile, goods consumption increased from $3.883 trillion to $3.903 trillion at the annual rate. With that said, the data were mixed, with durable goods spending lower (down 0.2 percent) and nondurable goods purchases higher (up 0.9 percent). Service sector spending was unchanged.
The savings rate did not change between June and July, staying at 4.4 percent. While this is below the pace of one year ago (5.1 percent), it was consistent with the 4.2 to 4.6 percent range experienced over the past six months.
Chad Moutray is the chief economist, National Association of Manufacturers.