Personal spending in the U.S. rose by slightly more than expected in the month of August, according to a report released by the Commerce Department on Monday.
The report said personal spending increased by 0.5 percent in August, while revised data showed that spending was unchanged in July.
Economists had expected spending to increase by about 0.4 percent compared to the 0.1 percent drop originally reported for the previous month.
Real spending, which is adjusted to remove price changes, also climbed 0.5 percent in August after dipping by 0.1 percent in July.
The Commerce Department also said personal income rose by 0.3 percent in August after edging up by 0.2 percent in July. The increase in income matched economist estimates.
Disposable personal income, or personal income less personal current taxes, also increased by 0.3 percent in August following a 0.2 percent uptick in the previous month.
With spending rising at a faster rate than income, personal saving as a percentage of disposable personal income fell to 5.4 percent in August from 5.6 percent in July.
However, analysts noted that the personal savings rate remains at a relatively high rate, averaging 5.3 percent over the past six months.
Peter Boockvar, managing director at the Lindsey Group, said, "An economic debate going is why with the 200k+ monthly job gains seen on average over the past 6 months is there not a bigger improvement in retail sales and part of that is due to the higher savings rate."
"Bottom line, as the real spending rate was in line with the estimate, Q3 GDP estimates should not be changed," he added.
The Commerce Department also said its personal consumption expenditures price index was unchanged in August after inching up by 0.1 percent in July. The annual rate of growth slowed to 1.5 percent,
Core PCE prices, which exclude food and energy prices, edged up by 0.1 percent for the month and were up 1.5 percent year-over-year.
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