The Commerce Department reported on Friday that consumer spending in the U.S. rose 0.3 percent m-o-m in July after a revised 1.1 percent m-o-m jump in June (originally a 1.0 percent increase m-o-m). Economists had forecast the reading to show a 0.3 percent m-o-m advance.

Meanwhile, consumer income surged 1.1 percent m-o-m in July, following a revised 0.2 percent m-o-m rise in the previous month (originally a 0.1 percent m-o-m uptick). Economists had forecast a 0.2 percent m-o-m increase.

The July jump in personal income primarily reflected gains in government social benefits and compensation of employees.

The personal consumption expenditures (PCE) price index, excluding the volatile categories of food and energy, which is the Fed's preferred inflation measure, rose 0.3 percent m-o-m in July, following a revised 0.5 percent m-o-m gain in June (originally a 0.4 percent m-o-m growth). Economists had projected the index would advance 0.3 percent m-o-m. That was the second consecutive month that core PCE inflation shows signs of easing.

In the 12 months through July, the core PCE surged 3.6 percent, the same as a revised 3.6 percent in the 12 months through June (originally a 3.5 percent climb). Economists had forecast a jump of 3.6 percent y-o-y.