Con­sumer spend­ing in June up slightly

The tiny 0.1 per­cent rise was the worst since Fe­bru­ary; in­comes flat.

Austin American-Statesman - - BUSINESS - By Martin Crutsinger Spend­ing

Con­sumer spend­ing slowed in June as in­come growth turned in the weak­est per­for­mance in seven months.

Spend­ing edged up a tiny 0.1 per­cent com­pared with a 0.2 per­cent rise in May, the Com­merce Depart­ment re­ported Tues­day. It was the weak­est show­ing since spend­ing in­creased a sim­i­lar 0.1 per­cent in Fe­bru­ary. In­comes were flat in June fol­low­ing a 0.3 per­cent rise in May. It was the worst read­ing since in­comes fell 0.1 per­cent in Novem­ber.

Even with the weak­ness in June, spend­ing for the April-June quar­ter helped lift over­all eco­nomic growth to a solid rate of 2.6 per­cent dur­ing the quar­ter. Econ­o­mists be­lieve solid job growth will keep eco­nomic growth at healthy lev­els this quar­ter.

An­drew Hunter, a U.S. econ­o­mist with Cap­i­tal Eco­nomics, said that the new re­port showed that con­sumer spend­ing had lost some mo­men­tum at the end of the sec­ond quar­ter “which isn’t a par­tic­u­larly promis­ing sign go­ing into the third quar­ter.”

The slow­down in in­come growth re­flected de­clines in div­i­dend and in­ter­est pay­ments and other in­vest­ment in­come. The key cat­e­gory of wages and salaries ac­tu­ally rose a solid 0.4 per­cent in June, re­flect­ing strong em­ploy­ment growth.

An in­fla­tion gauge tied to con­sumer spend­ing that is closely fol­lowed by the Fed­eral Re­serve was up 1.4 per­cent for the 12 months

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