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WSJ: Consumer Spending Accelerates in July
Source: The Wall Street Journal
(Aug. 30, 2010) — U.S. consumers accelerated their spending in July but income growth remained sluggish, a sign the economic recovery remains fragile.
Consumer spending rose 0.4% last month after staying flat in June, the Commerce Department said in a report Monday. But their incomes increased less than expected, up 0.2% after remaining unchanged in June.
Economists surveyed by Dow Jones Newswires expected the data to show income climbed 0.3% in July and spending rose 0.4%.
As spending accelerated, the national saving rate fell a bit last month, to 5.9% from 6.2% in June. Many Americans have been putting money away because of high U.S. joblessness and weak household balance sheets.
The economy's weakness kept a lid on prices in July, Monday's data showed. The core price index for personal consumption expenditures, which excludes food and energy prices because of their volatility, rose 0.1% in July from June.
Year-over-year, the gauge increased 1.4%. That index is closely watched by the U.S. Federal Reserve. Low price pressure will support record-low central bank interest rates that are intended to reduce high U.S. unemployment.
The overall PCE price index, which includes food and energy prices, rose 0.2% last month compared to June and increased 1.5% on a year-over-year basis.
