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STORY: U.S. consumer spending, which has been resilient despite inflation, increased by the most in six months in July - another sign the economy was gathering momentum.

That's according to data out Thursday from the Commerce Department that showed Americans shelled out for groceries, clothing, and household furnishings, and continued to spend at bars and restaurants - in addition to healthcare and investment advice services.

Consumer spending is the biggest driver of the U.S. economy, accounting for two-thirds of all economic activity. It's been supported by a still-tight labor market, although there are signs that’s starting to cool as job openings in July dropped to their lowest level in two-and-a-half years.

Thursday's report also showed inflation remained in check: the personal consumption expenditures price index, or PCE, rose 0.2% last month, matching June’s level.

That lifted hopes the Federal Reserve could keep interest rates where they are next month.

But the so-called core PCE, the Fed's preferred measure of inflation, rose slightly to 4.2% on an annual basis in July. It rose 4.1% year-over-year in June.