US consumers' earnings drop
Source: Agencies |
October 1, 2011, Saturday
|
Print Edition
Print Edition
CONSUMERS in the United States spent slightly more in August but earned less for the first time in nearly two years. The new data on spending and incomes suggest Americans used savings to cope with steep gas prices and a weaker economy.
The US Commerce Department yesterday said consumer spending rose 0.2 percent in August after a revised 0.7 percent increase in July.
Incomes fell 0.1 percent - the poorest showing since a similar 0.1 percent drop was recorded in October 2009.
Americans saved less money, with the savings rate falling to its lowest level since late 2009.
A decline in income growth could slow the economy, if it causes households to cut back on spending. Consumer spending accounts for 70 percent of US economic activity.
The economy grew at an annual rate of just 0.9 percent in the first six months of this year, the slowest growth since the recession officially ended more than two years ago.
Economists expect only slightly better growth in the second half of the year, based on expectations that consumers will spend more.
Some are predicting growth of about 2 percent. That would ease recession fears, but it's not enough to lower the unemployment rate, which was 9.2 percent in August.
The Federal Reserve last week agreed to shift US$400 billion of its portfolio of Treasury securities to try to drive down long-term interest rates.
The US Commerce Department yesterday said consumer spending rose 0.2 percent in August after a revised 0.7 percent increase in July.
Incomes fell 0.1 percent - the poorest showing since a similar 0.1 percent drop was recorded in October 2009.
Americans saved less money, with the savings rate falling to its lowest level since late 2009.
A decline in income growth could slow the economy, if it causes households to cut back on spending. Consumer spending accounts for 70 percent of US economic activity.
The economy grew at an annual rate of just 0.9 percent in the first six months of this year, the slowest growth since the recession officially ended more than two years ago.
Economists expect only slightly better growth in the second half of the year, based on expectations that consumers will spend more.
Some are predicting growth of about 2 percent. That would ease recession fears, but it's not enough to lower the unemployment rate, which was 9.2 percent in August.
The Federal Reserve last week agreed to shift US$400 billion of its portfolio of Treasury securities to try to drive down long-term interest rates.
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