The Commerce Department reported on Friday that consumer spending in the U.S. climbed 0.8 percent m-o-m in August after a revised 0.1 percent m-o-m drop in July (originally a 0.3 percent advance m-o-m). Economists had forecast the reading to show a 0.6 percent m-o-m increase.

Meanwhile, consumer income rose 0.2 percent m-o-m in August, following an unrevised 1.1 percent m-o-m jump in the previous month. Economists had forecast a 0.3 percent m-o-m gain.

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

The personal consumption expenditures (PCE) price index, excluding the volatile categories of food and energy, which is the Fed's preferred inflation measure, increased 0.3 percent m-o-m in August, following an unrevised 0.3 percent m-o-m increase in July. Economists had projected the index would rise 0.2 percent m-o-m.

In the 12 months through August, the core PCE jumped 3.6 percent, the same pace as in the previous two months. Economists had forecast an increase of 3.6 percent y-o-y.