US consumer spending grows in August, Fed's Evans supports later rate hike

Household spending in the US rose at a healthy rate in August, while personal growth slowed after a jump in July. According to the Commerce Department, consumer spending increased 0.4% on a monthly basis in the reported month after an upwardly revised 0.4% rise in July, beating the estimate of a 0.3% gain. In both months the spending increases were led by strong gains in spending on durable goods including cars. Meanwhile, personal income was up 0.3% in August, helped by another solid increase in wages and salaries, however the reading missed a 0.4% growth forecast. The result followed a 0.5% income gain in July, which was the best reading in eight months. The solid spending and income data reinforced the signs of strength in America's domestic economy that could lead to the Fed tightening interest rates despite the slowdown in emerging markets. 

Meanwhile, President of the Federal Reserve Bank of Chicago Charles Evans, while speaking at Marquette University in Milwaukee, noted that the best time for a lift-off of interest rates from near-zero level can be the middle of next year. He added that low rates should help the economy to sustain growth and normalise inflation. Evans is the FOMC voting member in 2015.