Article originally posted on CoStar on Sept. 30 2026

Americans spent at the fastest pace in over a year in August, helping fuel economic growth amid persistent inflation.

Inflation-adjusted personal spending rose 0.6% in August from a month earlier, according to Bureau of Economic Analysis data released Wednesday. It marked the biggest monthly increase since March 2025.

The Federal Reserve’s preferred measure of underlying inflation, the personal consumption expenditures price index excluding food and energy, rose 0.2% in August, with July’s reading revised lower. The index was up 3.4% from a year earlier.

“The consumer was shown to be on even stronger footing, with the pace of spending better than previously thought,” Bernard Yaros, lead U.S. economist at Oxford Economics, said in a statement. “Households are also sitting on a larger cushion amid this year’s energy price shock. With the consumer showing no signs of slowing, risks are that inflation will prove too sticky, which will further compel the Fed to act again this year.”

In a separate report released Wednesday, the Commerce Department raised its estimate of second-quarter gross domestic product growth from a 1.5% annualized rate to 2.2%, reflecting stronger consumer spending and business investment. Real final sales to private domestic purchasers, a key measure of underlying demand, were also revised up to 4.6%.

Among private industries, real estate and rental and leasing services ranked among the leading contributors to GDP growth in the second quarter, alongside information, finance and insurance.