US consumer spending rebounded in August despite COVID

U.S. consumer spending accelerated in August despite the surge in COVID cases, while the additional demand combined with supply shortages kept inflation high

WASHINGTON -- U.S. consumer spending accelerated in August amide a surge in COVID-19 cases, even as soaring demand and snarled supply chains kept inflation high.

Consumer spending rose 0.8% in August, up from a decline of 0.1% in July. Income rose by a smaller 0.2%, the Commerce Department reported Friday. That suggests consumers dug into their savings to fuel more spending on items like clothes and groceries, and to spend more online, even as the delta variant caused them to pull back on traveling and eating out.

Consumer prices increased 0.4% in August from July, the same increase as the previous month. In the past year, inflation rose 4.3%, up slightly from the previous month and the highest in more than three decades.

Supply shortages of everything from computer chips to furniture to paint and chemicals have driven up prices as the economy's rebound from the pandemic recession caught many companies flat-footed.