The amount of money consumers in the US spent in the month of June has increased at its slowest rate in four months, dragged down by flagging demand for cars and other long-lasting goods.
Consumer spending edged up only 0.2 percent compared to a 0.7 percent rise in May, according to the Commerce Department, but that figure may still pick up this summer as some major carmakers have posted stronger-than-expected Q2 sales results and others are expected to follow suit.
A slowdown going into the third quarter is likely to be kept in check by a strengthening housing sector and a tightening labor market, both of which lift individual wealth. Personal income was up 0.4 percent in June for a third straight month, the statisticians said.
Consumer spending makes up about 70 percent of US economic activity. The slight growth in June was in line with economist forecasts. Last week, the Federal Reserve said the overall economy was “growing moderately.”
Investors are keeping a close eye on all economic data released for a sign of when the Fed may announce a rate hike, which the central bank said it would do only once the economy has shown it has fully recovered from the 2008 global financial crisis.
Analysts have predicted the Fed will raise the rate in September, in what would be the first hike in a decade.
jd/cjc (AFP, Reuters)