MNI DATA ANALYSIS: US Pers Income Up 0.2% In Aug, PCE +0.1%>

--Core PCE Price Index +0.1%;Y/Y Now At +1.3% Vs +1.4% In July

--Real PCE Running +1.4% SAAR In 3Q Vs +3.3% In 2Q

--US BEA Says Can't Quantify Impact Of Hurricane Harvey

By Kevin Kastner, Sara Haire, and Holly Stokes

     WASHINGTON (MNI) - Personal income rose 0.2% in August, as 

expected, while a weaker-than-expected 0.1% rise in the core PCE price 

index cut the year/year rate for core inflation growth to 1.3% from 1.4% 

in July, data released by the Commerce Department Friday morning showed. 

     The year/year rate of growth for August core PCE prices was the 

lowest since November 2015 and suggests little movement in underlying 

rate of inflation as analysts debate the FOMC's possible rate hike in 

December. 

     Nominal PCE was up 0.1% in August, as expected. Durable goods 

spending fell by 1.1%, cut down by weak vehicle sales. Nondurable goods 

spending rose 0.3%, as did services spending. 

     For income, there were gains were reported for all the major 

categories, but wages and salaries were flat in the month due to soft 

payrolls and earnings and a drop in hours worked. 

     Disposable personal income rose 0.1% in the month, while real 

disposable income fell 0.1%. The saving rate held steady at 3.6% in 

August. 

     The overall PCE price index was up 0.2% in August following a 0.1% 

gain in July. However, the year/year pace remained at 1.4% for the third 

straight month. 

     Real PCE was down 0.1% in August following a 0.2% increase in July. 

After inflation adjustment, durable goods PCE fell 1.0% and nondurable 

goods PCE declined 0.2%, while services PCE was up 0.1%. 

     Through two months, real PCE was up 1.4% at an annual rate from the 

second quarter average, but would be up 1.7% after an MNI adjustment to 

compensate for lacking the last month of the quarter. This is a much 

slower pace than 3.3% real PCE gain reported with the final estimate of 

second quarter GDP on Thursday. As a result, PCE should be a small 

contributor to GDP growth in the third quarter. 

     BEA said they cannot separate out the effects of Hurricane Harvey, 

but did make "adjustments to estimates where source data were not yet 

available or did not fully reflect the effects of the storm." 

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,MT$$$$,M$U$$$,MAUDR$]