US income rose faster than spending in July, but consumption was flat after inflation. Consumers viewed current conditions more positively in August while their short-term outlook weakened. The decline in new-home sales was not statistically significant, yet unsold inventory reached 9.6 months of supply, adding another sign of caution in household demand.
The U.S. Bureau of Economic Analysis reported that personal income rose 0.4 per cent in July and disposable income increased 0.5 per cent, while spending gained a more modest 0.2 per cent. Consumption was unchanged after inflation and the saving rate was 3.0 per cent. The PCE price index rose 0.2 per cent for the month and 3.7 per cent over the year, leaving households with nominal income growth but no rise in real consumption.[1]
The Conference Board's consumer confidence index eased to 89.4 in August from 90.2, its lowest level in seven months. Respondents became more positive about current conditions, but the share expecting more jobs over the next six months fell to 14.6 per cent from 16.4 per cent. Responses collected from 3 to 16 August mentioned war, food prices, trade and employment more often than in July, showing where the weaker outlook was concentrated.[2]
New single-family home sales ran at a seasonally adjusted annual rate of 607,000 in July. The Census Bureau does not consider the 10.5 per cent monthly decline or the 6.3 per cent yearly decline statistically significant because their confidence intervals are wider than the changes. Even so, homes available for sale rose to 488,000, equal to 9.6 months of supply at the current sales pace, while the median price fell 2.3 per cent from a year earlier to 393,800 dollars.[3]
