US Consumer Spending Rose in May 06/29 07:47
WASHINGTON (AP) -- U.S. consumer spending rose solidly last month, good news
for the economy.
The Commerce Department said Wednesday that consumer spending increased 0.4
percent in May on top of a 1.1 percent surge in April. Spending on durable
goods such as autos and appliances grew 0.6 percent, down from a 2.6 percent
jump in April.
The numbers show that consumer spending, which accounts for about 70 percent
of U.S. economic activity, picked up in the spring after getting off to a slow
start in 2016. The economy grew at a lackluster 1.1 percent pace from January
through March, partly because consumer spending grew at the slowest pace in two
Still, Americans' incomes grew just 0.2 percent in May, down from 0.5
percent in April.
But it's unclear how American consumers will respond to Britain's decision
last week to leave the European Union, which so far has rattled global
financial markets and raised fears over prospects for the world economy.
On Tuesday, the Conference Board, a business group, reported that its
consumer confidence index rose in June to the highest level since October. But
its survey was taken before the "Brexit" vote.
The University of Michigan's consumer sentiment index, out last Friday,
registered deterioration in consumers' spirits this month.
An inflation gauge watched by the Federal Reserve showed prices are up 0.9
percent over the past year, 1.6 percent excluding volatile food and energy
costs. Both numbers are well below the Fed's target of 2 percent.