Americans' personal income rose in July but their spending climbed much faster, leaving the nation's savings rate near a record low.
Personal income, which includes wages, interest and government benefits, rose a slower-than-expected 0.2 percent last month, the Commerce Department said Friday. That was the smallest gain this year and followed a strong 0.7 percent increase in June.
Spending, however, went up 0.4 percent in July, slightly less than many analysts had expected. In June, spending rose 0.3 percent.
The Federal Reserve on Tuesday bumped up interest rates for the second time this summer by a quarter of a point, making it more expensive for millions of Americans to borrow. The Fed did this to slow the economy and keep inflation in check.
At the same time, the Fed hinted that no additional rate increases may be needed this year unless the economy shows signs of overheating or if inflation flares.