US consumer spending gains
Source: Agencies |
August 31, 2012, Friday
|
Print Edition
Print Edition
AMERICANS spent at the fastest pace in five months in July after earning a little more. The rise in income and consumer spending may boost an economy mired in subpar growth.
Consumer spending rose 0.4 percent in July from June, the US Commerce Department said yesterday. That followed no change in June and a slight decline in May.
Income grew 0.3 percent, matching the gains from May and June. Americans also earned 0.3 percent more after paying taxes.
Paul Dales, senior US economist at Capital Economics, said the rise in spending showed "there is still life in American consumers."
But he cautioned that higher gasoline prices and a decline in consumer confidence in August could dampen spending in coming months.
The savings rate after taxes fell to 4.2 percent. That's down slightly from 4.3 percent in June, a level which had been the highest in a year. Economists believe Americans began saving more due to doubts triggered by a sharp slowdown in job growth earlier this year.
Hiring picked up in July and could see further gains in August. The number of Americans seeking jobless benefits was flat last week at a seasonally adjusted 374,000, the US Labor Department said in a separate report yesterday.
Applications are a measure of the pace of layoffs. They have risen slightly over the past three weeks but remain lower than they were in the spring, when hiring nearly stalled. When applications fall consistently below 375,000, it suggests that hiring is strong enough to cut the jobless rate.
That raises hopes for a solid gain when the government releases its August jobs report next Friday.
Consumer spending rose 0.4 percent in July from June, the US Commerce Department said yesterday. That followed no change in June and a slight decline in May.
Income grew 0.3 percent, matching the gains from May and June. Americans also earned 0.3 percent more after paying taxes.
Paul Dales, senior US economist at Capital Economics, said the rise in spending showed "there is still life in American consumers."
But he cautioned that higher gasoline prices and a decline in consumer confidence in August could dampen spending in coming months.
The savings rate after taxes fell to 4.2 percent. That's down slightly from 4.3 percent in June, a level which had been the highest in a year. Economists believe Americans began saving more due to doubts triggered by a sharp slowdown in job growth earlier this year.
Hiring picked up in July and could see further gains in August. The number of Americans seeking jobless benefits was flat last week at a seasonally adjusted 374,000, the US Labor Department said in a separate report yesterday.
Applications are a measure of the pace of layoffs. They have risen slightly over the past three weeks but remain lower than they were in the spring, when hiring nearly stalled. When applications fall consistently below 375,000, it suggests that hiring is strong enough to cut the jobless rate.
That raises hopes for a solid gain when the government releases its August jobs report next Friday.
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