Consumer sentiment drops sharply due to tariff concerns
The Consumer Sentiment Index posted its largest monthly decline in August 2019 (-8.6 points) since December 2012 (-9.8 points) to 89.8. The recent decline is due to negative references to tariffs, which were spontaneously mentioned by one-in-three consumers. While the overall level of sentiment is still consistent with modest gains in consumption, the data nonetheless increased the likelihood that consumers could be pushed off the “tariff cliff” in the months ahead.
July personal spending rose more than income, leading to a decline in the savings rate
In July, personal income rose 0.1 percent, disposable personal income rose 0.3 percent and personal consumption expenditures (PCE) increased 0.6 percent, leading to a decline in the personal savings rate to 7.7 percent.
Core inflation tracker PCE price index up 0.2 percent in July and 1.6 percent year-on-year
The PCE price index increased 0.2 percent in July and 1.4 percent year-on-year. Excluding food and energy, the PCE price index increased 0.2 percent in July and 1.6 percent year-on-year.