US personal income rises 0.2% in August, well below 0.5% forecast
Spending rose 0.9%, matching forecasts, meaning households spent faster than they earned last month.
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UpdateWednesday, September 30, 2026 at 8:35 AM ET
US wholesale inventories rose 0.7% in August from a month earlier, above the 0.5% forecast but down from 1.3% in July, the Commerce Department said.
Personal income rose 0.2% in August from a month earlier, below the 0.5% forecast and down from 0.4% in July, the Commerce Department said.
Spending told a different story. Personal spending rose 0.9% in August, matching forecasts and up from 0.2% in July. That means households spent faster than they earned during the month, a gap that raises questions about how long current spending can hold up without stronger income growth.
The income data landed a minute after a revised core PCE price index for the second quarter of 2026 came in at 0.3%, against an expectation of 3.6% and down from an initially reported 3.3%. That followed a broader swing this week, after New York Fed President John Williams said Tuesday there was no urgency to move on rates, which had already pushed market pricing from three interest rate hikes down to one.
Slower income growth alongside a tame inflation reading reinforces the disinflation narrative that has helped ease long-dated Treasury yields off their highs, rather than complicating it. But the size of the income miss, set against spending that held at the expected pace, raises questions about the durability of the consumption that has supported recent spending data, a factor the Fed will weigh alongside the inflation trajectory laid out in the core PCE revision.