US consumer spending grew solidly in August despite stock market turbulence which some worried would spook shoppers, while prices remained subdued, Commerce Department data showed today.
Income growth was also firm, suggesting a steady rise in wages that would support much-awaited policy tightening by the Federal Reserve.
Personal consumption expenditures (PCE) rose 0.4% in August, the same monthly gain as July, but year-over-year were up a modest 3.2%.
US incomes grew 0.3% in the month, compared to 0.5% in July, but disposable income was up 0.4%, holding the same pace since the beginning of the year.
Analysts said the new data added more evidence for US economic growth picking up strength.
Inflation, though, was weak - the PCE price index, the key measure that the Fed watches to guide policy, was up just 0.3% from a year ago.
And when volatile food and energy are stripped out, it was up 1.3% year-on-year, well below the Fed's target rate of 2%.
The Federal Reserve has repeatedly said it wants to see more indications of tightening in the labour market - including both rising wages and incomes - and prices before it begins moving interest rates higher toward a more normal policy stance.