Consumer Spending Ticks Up Despite Less Income

[Purveyor]

WASHINGTON (AP) — Consumers increased their spending in June at the fastest pace in four months even though their income growth slowed.

Consumer spending rose 0.5 percent in June compared with May, when spending was up 0.2 percent, the Commerce Department reported Friday. It was the best gain since a 0.7 percent rise in February.

Income growth slowed to a 0.3 percent rise in June, weaker than May's 0.4 percent gain.

The hope is that strong consumer spending will help boost a lackluster economy to faster growth in the second half of this year. But for that to happen, economists say income growth needs to accelerate.

Spending on non-durable goods was up 1.3 percent, reflecting in part rising gas prices, while demand for durable goods rose 0.8 percent, reflecting strength in auto sales.

The combination of faster spending and slower income growth pushed the savings rate down slightly in June to 4.4 percent of after-tax income. It had been at 4.6 percent of after-tax income in May. The savings rate stood at 5.6 percent for all of 2012, indicating that consumers are trimming their savings to finance spending in the face of weak income growth.

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http://www.oregonlive.com/business/index.ssf/2013/08/consumer_spending_ticks_up_des.html

[mick063]

1. Nice to know

that those textile workers in Bangladesh have a little more job security. That is until they die on the job.