U.S. consumer spending rose in August at the slowest pace in six months, moderating from more robust readings on the biggest part of the economy. Inflation remained near the Federal Reserve’s target pace.
Purchases, which account for about 70 percent of the economy, rose 0.3 percent from the prior month, slowing from 0.4 percent the prior month, Commerce Department figures showed Friday, and matching the median forecast in Bloomberg’s survey. Incomes rose 0.3 percent, less than projected.
The softer readings may signal that consumers aren’t as eager to splurge even amid a solid labor market, lower taxes, and improving finances that boosted second-quarter consumption. A trade war that’s widened to include tariffs on consumer goods from China has the potential to raise prices and affect demand, after signs that the tensions are hurting exports and business investment.
“Consumers aren’t overdoing it,” said Russell Price, senior economist at Ameriprise Financial Inc. in Detroit, who accurately forecast the household spending gain. “The economy is growing at a solid rate but not at an overly strong pace that would otherwise induce inflation.”
Inflation-adjusted spending rose 0.2 percent, also the weakest since February.
The Fed’s preferred measure of inflation remains near the central bank’s 2 percent…