The U.S. Commerce Department released personal spending and income figures on Friday. Personal spending rose 0.3% in July, missing expectations for a 0.4% gain, after a 0.3% increase in June. June's figure was revised up from a 0.2% increase.

Consumer spending makes more than two-thirds of U.S. economic activity.

Personal spending was driven by higher demand for automobiles. Spending on auto mobiles jumped 1.1% in July.

The saving rate rose to 4.9% in July from 4.7% in June.

Personal income increased 0.4% in July, in line with expectations, after a 0.4% gain in June.

Wages and salaries climbed 0.5% in July, the largest increase since November 2014.

The personal consumption expenditures (PCE) price index excluding food and energy rose 0.1% in July, in line with forecasts, after a 0.1% gain in June.

On a yearly basis, the PCE price index excluding food and index increased 1.2% in July, the smallest rise since March 2011, after a 1.3% gain in June.

The PCE index is below the Fed's 2% inflation target. The PCE index is the Fed's preferred measure of inflation.