Highlights
Personal income rose 0.3% in July, at the low end of trend and below a 0.5% rise in June. In a good sign, private wages & salaries rose sharply, while proprietor and rental income fell.

Personal spending jumped 1.0% for a second straight month, fed once again by a big jump, this time 4.7%, in spending on durable goods, a reflection of heavy car and light truck purchases. Spending on non-durable goods rose 0.6% compared to a 0.7% gain in June, while spending on services rose 0.4%.

The big jump in spending together with the small rise in income led to a 0.6% decline in the savings rate, well below the unchanged reading in June which itself was well below prior months. The latest savings reading is lowest since records start in 1959.

Consumers apparently dipped into their savings to get in on the big auto incentives that began in June. With the consumer tapping out, the incentive push has clearly moved sales forward at the expense of future sales -- a negative not only for future sales but for future production and future employment in auto-related industries.

In a final piece of data, core PCE prices rose a mild 0.1% and are up a tame 1.8% year-on-year.

The report is certain to make headlines in the general press, especially the bad news on the savings rate. But the data point to a strong start to third quarter consumption, no surprise given the auto push.