U.S. Consumer Spending Revs Up During June
U.S. consumer spending rose at the fastest pace in three months in June, providing momentum for the economy going into the second half of the year.
The Associated Press reported that consumer spending increased 0.4% in June on a seasonally adjusted basis following slower increases of 0.3% in May and 0.1% in April, the Commerce Department said Friday (Aug. 1).
That was the best showing since a 0.8% surge in spending in March, which reflected a rebound after a harsh winter had kept consumers from the malls and auto showrooms.
Consumer spending is closely watched because it accounts for two-thirds of economic activity.
Americans saw earnings rise 0.4% in June, matching the May increase. Income growth has lagged in this recovery but has shown recent signs of some acceleration.
Paul Dales, a senior U.S. economist at Capital Economics, said the strong gains in employment over the past six months should support stronger consumer spending in the second half of this year. He predicted that consumer spending will increase at an annual rate of 3% in the next six months, an increase from a more modest 2.3% average growth rate in spending over the last two years.
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