Auto sales crimp US consumer spending; inflation muted
NEW YORK: U.S. consumer spending in June advanced at its slowest pace in fourth months as demand for automobiles softened, suggesting the economy lost some momentum at the end of the second quarter.
But the moderation in consumer spending could be temporary as Fiat Chrysler Automobiles and Nissan Motor Co Ltd said on Monday their U.S. July sales outstripped expectations on the strength of sport utility vehicles sales. Consumer spending rose 0.2 percent after a downwardly revised 0.7 percent increase in May, the Commerce Department said. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was previously reported to have advanced 0.9 percent in May.
June's increase was in line with economists' expectations and the data was included in last week's second-quarter gross domestic product report, which showed consumer spending expanding at a 2.9 percent annual rate and the overall economy growing at a 2.3 percent pace. While the tepid consumer spending suggests less vigor in the economy heading into the third quarter, any slowdown is likely to be mitigated by a strengthening housing sector and tightening labor market, which are boosting household wealth.