Americans Unzip Wallets in Summer Spending Surge

03 September 2002

Faced with seemingly limitless corporate sleaze and stock market volatility, Americans appear to have taken to retail therapy, with new figures from the Commerce Department showing the biggest rise in consumer spending for nine months.

Personal expenditure jumped 1% in July, following a 0.5% rise in June. The gain is the largest since October last year.

Spending on durable goods jumped 3.7%, up from a 1.6% increase the month before, while non-durable products and services both saw 0.6% growth (compared with June’s 0.7% and 0.2% respectively).

However, spending may be curtailed should personal incomes – which stayed flat last month – begin to fall.

Also causing concern is a dip in confidence, with the University of Michigan’s monthly barometer of consumer sentiment dropping from 88.1 in July to 87.6 in August. The index of consumer expectations for the future also fell, hitting 80.6 from 81 last month.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff