The Commerce Department reported on Thursday that consumer spending in the U.S. rose 1.0 percent m-o-m in August after a revised 1.5 percent m-o-m increase in July (originally a 1.9 percent m-o-m gain). Economists had forecast the reading to show an 0.8 percent m-o-m advance.

Meanwhile, consumer income decreased 2.7 percent m-o-m in August, following a revised 0.5 percent m-o-m advance in the previous month (originally a 0.4 percent m-o-m increase). Economists had forecast a 2.4 percent m-o-m decline.

The August drop in personal income was more than accounted for by a decrease in unemployment insurance benefits. Partially offsetting the drop in unemployment insurance benefits was an increase in compensation in August.

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 August, following a revised 0.4 percent m-o-m increase in the prior month (originally a 0.3 percent m-o-m gain). Economists had projected the index would rise 0.3 percent m-o-m.

In the 12 months through August, the core PCE increased 1.6 percent, following a revised 1.4 percent climb in the 12 months through July (originally a 1.3 percent jump). Economists had forecast an advance of 1.4 percent y-o-y.