Investing.com –U.S. consumer spending was unchanged in August, missing expectations for a slight uptick, while the annual increase in core PCE prices rose closer to the Federal Reserve's (Fed) target, official data showed on Friday.
In a report, the Commerce Department said that personal spending was unchanged in August from the prior month, below expectations for a 0.1% rise, and compared to a gain of 0.4% in July, that was revised up from an initial 0.3% advance.
Consumer spending is the single biggest source of U.S. economic growth, accounting for as much as two-thirds of economic activity.
Personal income, meanwhile, rose by a seasonally adjusted 0.2% in August, in line with forecasts. That was after rising 0.4% a month earlier.
Real personal consumption unexpectedly slipped by a seasonally adjusted 0.1% last month, missing expectations for a 0.1% gain and compared to July’s 0.3% increase.
Meanwhile, the core PCE price index rose 0.2% last month, matching expectations and compared to July’s 0.3% advance.
The core PCE price index rose at an annualized rate of 1.7%, in line with forecasts. July’s 1.6% gain had held steady at that level since March.
The Federal Reserve uses core PCE as a tool to help determine whether to raise or lower interest rates, with the aim of keeping inflation at a rate of 2% or below.
Immediately following the report, EUR/USD was trading at 1.1165 from around 1.1161 ahead of the release of the data, GBP/USD was at 1.2990 compared to 1.2959 previously, while USD/JPY was at 101.18 from 101.34 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 95.78, compared to 95.86 ahead of the report.
Meanwhile, U.S. stock futures pointed to a flat open. The blue-chip Dow futures gained 14 points, or 0.08%, the S&P 500 futures edged forward 2 points, or 0.10%, while the tech-heavy Nasdaq 100 futures inched up 3 points, or 0.03%.
Elsewhere, in the commodities market, gold futures traded at $1,328.40 a troy ounce, compared to $1,326.15 ahead of the data, while crude oil traded at $47.82 a barrel from $47.70 earlier.