Consumer spending, inflation up in July; incomes cool

New York

US consumer spending extended gains into July and inflation rose to a six-year high, reflecting economic strength that should keep Federal Reserve policy makers on track to keep gradually raising interest rates.

Purchases, which account for about 70 per cent of the economy, rose 0.4 per cent from the prior month for the second straight time, matching economists' estimates, Commerce Department figures showed on Thursday. Incomes advanced 0.3 per cent, less than projected. The Federal Reserve's preferred measure of inflation ticked up, as forecast, to a 2.3 per cent annual gain, the most since 2012.