The U.S. Department of Commerce’s Bureau of Economic Analysis (BEA) reported Thursday morning that personal income increased month over month by 0.4% in July, after remaining flat in June. Disposable personal income and personal consumption expenditures (PCE) both increased by 0.3%.

Economists were looking for an increase of 0.4% in both income and spending.

The PCE index came in at 1.4%, the same as the June change, and excluding food and energy, the index dipped from 1.5% in June to 1.4%. Real PCE increased by 0.2%.

Low unemployment, rising incomes, low inflation, and a bullish stock market have all contributed to putting U.S. consumers on their best financial footing in several years.

The PCE index is the Federal Reserve’s preferred measure of U.S. inflation. The index was unchanged from its June level, but it is down from a high of 2.2% posted earlier this year. The PCE index remains solidly below the Fed’s 2.0% to 2.5% inflation target.

The increase in personal income in November primarily reflected increases in wages and salaries and personal income receipts. The increase in real PCE reflects increases in consumer spending on goods, primarily furnishings and durable household equipment. An increase in spending on services was largely due to spending on food services and accommodations.

Spending on durable goods rose by 0.6% month over month and spending on services rose 0.2%.

Personal savings fell by a tenth of a point, or 3.5%, to $510.2 billion, compared with June savings of $515.7 billion. That’s the second lowest level since 2008.

The employment situation report from the U.S. Bureau of Labor Statistics will be released Friday morning and is expected to show a gain of 180,000 nonfarm jobs added in August, down from 209,000 added in July. Hourly earnings are forecast to rise by 0.2% month over month and 2.6% year over year.

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