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Highlights from August's report
Disposable personal income
Real disposable personal income (or DPI) increased 0.3% in August compared to a 0.1% increase in July. Real DPI measures personal income that's available to spend, net of any personal taxes payable, and adjusted for changes in price levels. Higher private-sector wages and salaries, particularly in the services industries, caused the August increase.

Real personal consumption expenditure (or PCE) rose 0.5% in August to ~$10.9 trillion. Real PCE measures consumer spending, net of inflation. Higher motor vehicle and parts sales mostly drove the August increase. Back-to-school shopping probably also drove higher consumption. Real PCE declined by 0.1% in July.

Motor vehicle sales rose strongly in August, by 9.9% month-over-month, to 17.5 million units. Car sales are a key gauge of discretionary consumer spending and a sign of economic confidence.

Car sales, however, declined in September to 16.4 million units, according to Autodata. The impact of back-to-school shopping is also likely to fade in September's figures. Yet, with the labor market recovering, and Halloween, Thanksgiving, and Christmas upon us, consumer sector companies may see sales rise.

The personal savings rate, or nominal DPI less personal outlays, fell to 5.4% in August from 5.6% in July. Changes in the savings rate have implications for consumption and investment. If the savings rate decreases, individuals are spending more relative to incomes. This increases current consumption. On the flip side, an increased savings rate boosts the supply of personal wealth held in the form of various asset classes such as stocks (SPY), bonds (TLT), real estate, and cash, among others.

In the next article, you'll read about the all-important inflation measure, the change in the PCE price index.