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US July Personal Income Growth Expected to Remain in Line with June, Spending Growth to Slow

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Personal income is forecast to rise by 0.2% in July, based on a survey compiled by Bloomberg, following a matching 0.2% gain in June.

The report on personal income and consumption for July is scheduled to be released at 8:30 am ET Wednesday.

Wages and salaries are seen as only a modest positive factor for the headline figure. Private nonfarm payrolls rose by 30,000 in July, the same as in the previous month, while the average workweek remained at 34.3 hours, so the aggregate hours index held steady. Hourly earnings rose by 0.1% in July after a 0.3% gain in June.

For consumption, control group retail sales, which exclude motor vehicles, gas building materials and food services and feeds into the goods PCE calculation, fell by 0.4% in July after a 0.4% gain in the previous month.

Analysts expect personal consumption to increase by only 0.1% in July after a 0.3% gain in June. Real PCE, consumption after adjustment for inflation, is expected to hold steady after 0.4% gain.

PCE prices are forecast to rebound by 0.1% after a 0.1% decline in the June report, while core prices are expected to increase by 0.2% after a 0.1% gain.

Analysts expect the year-over-year rate for overall PCE prices to slow to 3.6% from 3.7% in June while core PCE prices are seen remaining at a 3.3% pace.

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