August incomes, spending not great, not bad. Unlike regular Americans, Fed not adjusting to reality

A quick rundown of the income and spending report for August that came out on Friday.

First off, it seems that consumer spending is starting to plateau in the US, especially when adjusted for inflation. But the savings rate remains low.

Personal outlays increased $67.8 billion in August (table 3). Personal saving was $652.8 billion in August and the personal saving rate—personal saving as a percentage of disposable personal income—was 3.5 percent (table 1).....

The 0.1 percent increase in real PCE in August reflected an increase of 0.2 percent in spending on services and a decrease of 0.2 percent in spending on goods (table 7). Within services, health care and transportation services were the leading contributors to the increase. Within goods, "other" nondurable goods (including personal care products, and newspapers, printed materials, and other nondurable recreation items), and recreational goods and vehicles were the leading contributors to the decrease.

But a lot of that August plateau is due to the decline in gas prices that continued that month. Take out gasoline/energy, and spending was up by nearly $110 billion.

And you can see the adjustments Americans have made in 2022, using services more and not spending as much (omn an inflation-adjusted basis) on goods. Especially non-durable goods that had significant price rises in the first half of 2022, such as groceries and gasoline.

On the income side, we also saw indications of leveling off, particularly among wages and salaries. The $71.6 billion increase in personal income and $39.1 billion increase in wages and salaries were the lowest in 7 months.

That being said, those income numbers also show that wages and salaries in America were continuing on the consistent climb that it's been on since the Biden stimulus was signed in March 2021, and unemployment payments are lower than they were before the pandemic began.

Again, if incomes and consumer spending are decent but not torrid, why is the Federal Reserve hell-bent on continuing to jack up interest rates and crush the economy, along with many people's 401k's?

Especially when many of these "inflation" issues come down to supply chain constraints, a disrupted level of available workers due to the pandemic and demographic reasons...and flat out GREED that has lifted corporate profits past $3 TRILLION on an annual rate?