Highlights
Today's personal income report showed a rebounding consumer but tame core inflation. Personal income growth continued strong in July, posting a 0.5 percent increase, following a 0.4 percent boost in June. The July advance was above the consensus projection for a 0.3 percent rise. Within personal income, the wages and salaries component grew 0.5 percent in July, matching June's gain. Personal income on a year-on-year rebounded to up 6.6 percent from up 6.1 percent in June.

Personal consumption strengthened in July, rising 0.4 percent, following a 0.2 percent increase in June. The market consensus had forecast a 0.4 percent jump in PCEs for June. Spending was led by nondurables, which rose 0.4 percent in July while durables and services advanced 0.3 percent and 0.2 percent, respectively. Personal consumption on a year-on-year edged declined to up 4.7 percent from up 5.2 percent in June.

The consumer is finding a little more spare change for saving as the personal saving rate rose to 0.7 percent in July from 0.5 percent in June.

There was good news on the inflation front as the core PCE price index rose 0.1 percent, down from June's 0.2 percent increase. The July core PCE price index came in below the consensus forecast for a 0.2 percent increase. The overall PCE price index also moderated, rising 0.1 percent in July, following a 0.2 percent increase in June. The core PCE price index on a year-on-year basis was unchanged at 1.9 percent while the overall PCE price index slipped to 2.1 percent from 2.3 percent in June. The core PCE price index has been inside the Fed's implicit target zone of 1 to 2 percent for two consecutive months.