Briefing.com: Personal Income and Spending

Updated: 29-Aug-25 09:24 ET

July Personal Income and Spending

Updated: 29-Aug-25 09:24 ET

Highlights

Personal income, bolstered by a 0.6% increase in wages and salaries, increased 0.4% month-over-month in July (Briefing.com consensus: 0.4%) following a 0.3% increase in June.
Personal spending increased 0.5% month-over-month (Briefing.com consensus: 0.5%) following an upwardly revised 0.4% increase (from 0.3%) in June.
The PCE Price Index increased 0.2% month-over-month (Briefing.com consensus: 0.2%) following a 0.2% increase in June.
Core PCE inflation, which excludes food and energy, increased 0.3% month-over-month (Briefing.com consensus: 0.3%) following a 0.3% increase in June.
On a year-over-year basis, PCE inflation was up 2.6%, versus 2.6% in June, while core PCE inflation was up 2.9%, versus 2.8% in June. The Fed's inflation target is 2.0%.

Key Factors

The PCE Price Index for Goods was down 0.1% month-over-month and up 0.5% year-over-year versus 0.6% in June.
The PCE Price Index for Services was up 0.3% month-over-month, leaving it up 3.6% year-over-year versus 3.5% in June.
Wages and salaries increased 0.6% month-over-month after increasing 0.1% in June.
Rental income was up 0.5% month-over-month after being down 0.4% in June.
Personal interest income fell 0.1% month-over-month after increasing 0.2% in June. Personal dividend income was up 0.3% month-over-month following a 0.2% decline in June.
Real disposable income was up 0.2% month-over-month and was up 2.0% year-over-year versus 1.7% in June.
Real personal spending increased 0.3% month-over-month and was up 2.1% year-over-year versus 2.2% in June.
The personal savings rate, as a percentage of disposable personal income, held steady at 4.4%.

Big Picture

The key takeaway from the report is that it was largely in line with expectations, so the market is apt to stick to its thinking that there will be a rate cut in September even though PCE inflation remains stuck above the Fed's 2.0% target.