US consumer spending increases moderately in July

U.S. consumers' income and expenditures increased moderately in July, indicating the inflation run consistently below the Federal Reserve's target.

Personal income increased 0.4 percent in July following the same growth in the previous month. Personal spending increased 0.3 percent after rising at the same rate in June, the Commerce Department said on Friday.

Personal saving rate continued rising in the month, reflecting consumers' caution on spending. The personal saving rate rose to 4.9 percent in July from June's 4.7 percent.

The price index for the personal consumption expenditure (PCE), a gauge for the inflation level preferred by the Federal Reserve, increased 0.1 percent in July, compared with an increase of 0.2 percent in June. The PCE price index, excluding food and energy, increased 0.1 percent in July, the same increase as in June.

Both the headline and core PCE index have been below the central bank's 2 percent target for years. The Fed chair Yellen said in her recent testimony to the Congress that low oil prices and ongoing employment gains should continue to bolster consumer spending.