In its report on personal income and spending for July, the U.S. Bureau of Economic Analysis data shows that personal income in current dollars grew by 0.1% month-over-month, as did personal spending (called personal consumption expenditures, or PCE). Real disposable personal income rose 0.1%, and real PCE rose less than 0.1%. “Real” figures are given in chained 2005 dollars.

Consensus estimates had called for month-over-month growth of 0.2% in personal income and 0.3% in spending.

Some of the details are disheartening. Private wages and salaries fell $15.3 billion in July after an increase of $31.3 billion in June. The impact of federal budget cuts reduced government wages and salaries by $7.7 billion in July, compared with a drop of $700 million in June.

Current taxes decreased by $7.8 billion, after an increase of $11 billion in June. Falling wages and salaries pave the road for lower tax collections.

The personal savings rate was essentially unchanged month-over-month at 4.4%.

The core PCE price index rose 0.1% in July compared with a rise of 0.2% in June. Annualized, that calculates out to an inflation rate of 1.2%, and could be a signal to the Fed to keep the stimulus spending at current levels when the FOMC meets next month. There are many economists and arguments supporting more inflation as a way to boost employment.

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