Data for July 2016

The US personal income for July was up 0.4% which was as expected. The longer work hours and job growth helped to support wages. The prior month was revised higher at +0.3% vs +0.2%.

Personal spending was up 0.3% vs 0.2% estimate. Like wages, the prior month was revised higher to +0.5% vs +0.4%. This is the 4th straight increase in spending.

Real Personal spending, however, was lower in July at +0.2% vs +0.3% estimate. The prior month was revised higher to +0.4% from +0.3%.

On the surface, the data - with revisions - is not too bad. It gets the 3rd quarter off to a good start. With the Fed still focused on the data, this data supports the notion of an economy moving forward and rebounding from the slow 1st half. The US employment report on Friday.

Durable goods purchases increased 1.9% after adjusting for inflation. This was the largest increase in three months. Non durable goods purchases were not so robust falling -0.1%. Lower gasoline prices helped contribute to the fall.

Service spending rose +0.2%

The savings rate for the month increased to 5.7% from 5.5%.