US personal spending posted another healthy gain in August, even as consumers saved more, the US government said today in a report boosting hopes the crucial household sector will be able to support the shaky economic recovery.
Spending grew by 0.8 per cent in August after an upwardly revised 0.9 per cent increase in July. Personal income, propelled by the effects of a large tax cut enacted by Congress in the spring, gained 0.2 per cent in August.
A combination of lower tax withholding rates and the advance tax credit checks sent in July and August to families with children gave disposable personal income - personal income minus taxes and other bills - a shot in the arm. Disposable income grew by 0.9 per cent after a 1.5 per cent jump in July.
But consumers did not pour all of the extra money into spending, as the personal saving rate - savings as a percentage of disposable income - grew for a second straight month, to 3.8 percent, its highest level since February.
The income and spending figures were close to Wall Street analysts' expectations for gains of 0.3 per cent and 0.8 per cent, respectively.