WASHINGTON—Steady consumer spending and income gains have put the U.S. economy on track for solid growth in the third quarter.
Household outlays rose a seasonally adjusted 0.5% in August from the prior month, rebounding from a flat reading in July, the Commerce Department said Monday.
Spending rose 4.1% from a year earlier, slightly faster than the pace seen in prior months. Personal income rose 0.3% in August from the prior month, but income growth has accelerated only modestly this year as U.S. wages rise more slowly than they did before the 2007-2009 recession.
Recent growth in spending and income is “acceptable,” J.P. Morgan Chase economist Michael Feroli said. “But it would be nice to see some acceleration.”
Still, private economists are predicting that gross domestic product, the broadest measure of output across the U.S. economy, has expanded at a healthy pace in the quarter that ends Tuesday, buttressed by steady consumer spending.