The Commerce Department reported on Friday that consumer spending in the U.S. rose 0.6 percent m-o-m in July, following an unrevised 0.5 percent m-o-m gain in June. Economists had forecast the reading to show a 0.5 percent m-o-m growth.

Meanwhile, consumer income edged up 0.1 percent m-o-m in July, following a revised 0.5 percent m-o-m increase in the previous month (originally a 0.4 percent m-o-m rise). Economists had forecast a 0.3 percent m-o-m advance.

The July increase in personal income primarily reflected increases in compensation of employees and government social benefits to persons, which were partially offset by a decline in personal interest income.

The personal consumption expenditures (PCE) price index, excluding the volatile categories of food and energy, which is the Fed's preferred inflation measure, rose 0.2 percent m-o-m in July, the same pace as in the prior month. Economists had projected the index would increase 0.2 percent m-o-m.

In the 12 months through July, the core PCE increased 1.6 percent, the same pace as in the 12 months through June. Economists had forecast a gain of 1.6 percent y-o-y.