The Commerce Department said personal consumption increased .4% over June. That increase matched the estimates of the economic survey by Dow Jones Newswires.
The savings rate fell to 4.2% from 4.3%. Savings had been at the highest rate over a one-year period.
 
Inflation continues to be moderate. This gives the Fed room to take action if it still feels the economy needs a jumpstart as it meets on September 12 and 13. The price index for personal consumption increased 1.3% on a year-over-year basis in July.
 
This is well below the Fed’s target of 2%. The index was basically unchanged from month to month, increasing only .1% in June.
 
Fed officials indicated recently that they are willing to take action unless the economy shows substantial signs of improvement.

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