Consumer spending in U.S. falls for first time in six months

Consumer spending in the United States unexpectedly dropped in July for the first time in six months, a sign households are lagging behind as wages fail to accelerate. More

To continue reading this article, please do one of the following.



economic activity

Consumer spending in U.S. falls for first time in six months

BLOOMBERG NEWS PHOTO/ATISHA PAULSON
U.S. CONSUMERS - SUCH AS THIS COUPLE IN NEW YORK - did not spend as much as expected in July, according to Commerce Department figures, as household purchases fell 0.1 percent compared with June, while personal income increased 0.2 percent, the smallest gain this year.
Posted 8/29/14

WASHINGTON - Consumer spending in the United States unexpectedly dropped in July for the first time in six months, a sign households are lagging behind as wages fail to accelerate.

Household purchases decreased 0.1 percent after increasing 0.4 percent in June, Commerce Department figures showed Friday in Washington, D.C. None of the 79 economists in a Bloomberg survey projected a decrease. Incomes climbed 0.2 percent, the smallest monthly advance this year.

Consumer spending, which accounts for about 70 percent of the economy, has been held back by tight credit and meager wage growth that is barely able to keep up with inflation. A sustained labor market upswing is needed to lift earnings and help boost outlays at retailers such as Ross Stores Inc.

“It’s a weak starting point for the third quarter,” said Jacob Oubina, senior U.S. economist at RBC Capital Markets LLC in New York. “It’s going to lead to a markdown in third-quarter forecasts.” RBC Capital Markets is the top forecaster of personal spending over the past two years, according to data collected by Bloomberg.

Other reports today showed consumer sentiment unexpectedly rose in August and manufacturing in the Midwest region picked up more than projected.

Sentiment improves

The Thomson Reuters/University of Michigan final sentiment index rose to 82.5 from 81.8 in July. The median projection in a Bloomberg survey of economists called for 80 after a preliminary August reading of 79.2.

The Institute for Supply Management-Chicago Inc.’s business barometer rose to 64.3 this month from 52.6 in July. The median forecast of 44 economists in a Bloomberg survey projected the index would climb to 56.5. Readings greater than 50 signal growth.

Stocks were little changed heading into what’s shaping up as the biggest monthly gain since February amid increasing speculation that global central banks will support economic growth. The Standard & Poor’s 500 Index declined less than 0,.1 percent to 1,996.2 at 10:28 a.m. in New York.

Next Page
Calendar
PBN Hosted
Events

Join PBN for the best networking event and party of the winter - January 15, 2015 - the Book of Lists Party at the Providence Public Library. Reserve your spot early!
  • Best Places to Work
    Enrollment is now open for the 7th annual Best Places to Work program. Winners w ...
  • Manufacturing Awards
    Applications are now being accepted for the 2nd Annual Manufacturing Awards. Dea ...
Advertisement
Purchase Data
Book of Lists
Lists
Book of Lists cover
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.
Data icons
Data can be purchased as single lists, in either Excel or PDF format; the entire database of the published book, in Excel format; or a printed copy of the Book of Lists.
  • Purchase an e-File of a single list
  •  
  • Purchase an e-File of the entire Book of Lists database
  •  
  • Purchase a printed copy of the Book of Lists
  •  
    National
    Local
    Latest News
    Advertisement