US: Income growth likely to moderate to 0.3% in August - Westpac

Research Team at Westpac, suggests that the increased participation over the past year has helped to moderate US wage pressures but July still saw a 0.4% gain, leaving annual growth at a healthy 3.3%yr.

Key Quotes

“Come August, income growth is likely to moderate to 0.3% but annual growth will be sustained near its Jul level.

Confidence and wealth are also supportive of marginal consumption. Yet, as per August retail sales, households continue to show a restrained approach to spending. Gains for services are likely to mitigate some of the softness in goods consumption, but spending growth will still slow to 0.2%.

Inflation has continued to disappoint, principally due to the impact of energy prices and the USD. But underlying growth in service prices remains robust. In August, expect headline and core prices to both rise around 0.2%.”