US consumer spending continued to rise in June, outstripping the increase in personal income, according to the Commerce Department. However, confidence seems to be slipping.
In spite off widespread job losses, personal consumption climbed 0.4% in June, faster than personal income, which rose 0.3%, and double the rate expected by economists. When adjusted for inflation, the real increase in spending came to 0.2%, the same as April and May.
Savings, meanwhile, fell from 1.2% of disposable personal income to 1.1%. However, the government revised its figures for last year to suggest that consumers had saved more than previously thought, implying they may have slightly more to spend now.
On a less positive note, consumer confidence fell in July, following monthly rises in May and June [WAMN: 27-Jun-01; 30-May-01]. The Conference Board’s index dropped from 118.9 in June to 116.5, though it remains above February’s low. The subindex assessing consumers’ views on their current position fell from 156.8 to 152, while that measuring expectations sank from 93.5 to 92.9.
News source: Wall Street Journal