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US personal spending rose at a solid clip in August for a third month, suggesting consumers continued to power the economy despite elevated inflation.

Consumer spending, adjusted for changes in prices, increased 0.4% last month, according to Bureau of Economic Analysis data out Friday.

The consecutive strong gains in consumer spending add to evidence of a solid economy in the current quarter, building upon even greater growth in the prior period than previously thought. However, maintaining such momentum hinges in large part on the labor market, which has shown signs of faltering with slower hiring and more moderate wage gains.

Americans are also still dealing with sticky inflation, which risks staying elevated as President Donald Trump’s tariffs trickle through the economy. The so-called core personal consumption expenditures price index, which excludes food and energy items and is favored by the Federal Reserve, rose 0.2% from July. From the prior year, the gauge held stubbornly at 2.9%.
While many companies initially held off on raising prices as they worked through built-up inventories, profit margins are at risk unless firms pass along some of the higher costs.

Today's show features:

Elizabeth Renter, Senior Economist at NerdWallet, and Bloomberg TV and Radio International Economics & Policy Correspondent Mike McKee, on the August PCE report and the US labor market
Bloomberg News Justice Department Reporter Chris Strohm on Former FBI Director James Comey being charged with lying to Congress and obstruction
Bloomberg News Finance Reporter Max Abelson on revelations about the support network for Jeffrey Epstein
Carol Schleif, Chief Market Strategist at BMO Private Wealth, on stock market valuations

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US Consumer Spending Powers On Even as Inflation Persists

Bloomberg Businessweek