The Commerce Department reported on Friday that consumer spending in the U.S. rose 1.9 percent m-o-m in July after a revised 6.2 percent m-o-m climb in June (originally a 5.6 percent m-o-m gain). Economists had forecast the reading to show a 1.5 percent m-o-m advance.

Meanwhile, consumer income increased 0.4 percent m-o-m in July, following a revised 1.0 percent m-o-m drop in the previous month (originally a 1.1 percent m-o-m fall). Economists had forecast a 0.2 percent m-o-m decline.

The July advance in personal income was more than accounted for by compensation of employees as portions of the economy continued to reopen, the report said. Proprietors’ income and rental income of persons also contributed to the gain. Partially offsetting these increases were declines in government social benefits and income on assets.

The personal consumption expenditures (PCE) price index, excluding the volatile categories of food and energy, which is the Fed's preferred inflation measure, went up 0.3 percent m-o-m in July, following a revised 0.3 percent m-o-m increase in the prior month (originally a 0.2 percent m-o-m advance). Economists had projected the index would rise 0.5 percent m-o-m.

In the 12 months through July, the core PCE increased 1.3 percent, following a revised 1.1 percent gain in the 12 months through June (originally a 0.9 percent jump). Economists had forecast an advance of 1.2 percent y-o-y.