Consumer spending accounts for 70 percent of economic activity, so it needs to recover for the economy to keep its momentum in the second half of the year. Economists had expected spending would slow in July based on reports of weak retail sales, but they said the slowdown should be temporary given the fact that job growth has been so strong. The July spending decline reflected a 0.7 percent drop in purchases of durable goods such as autos and a smaller 0.1 percent dip in purchases of nondurable goods. An improving job market means rising household incomes, greater consumer confidence and thus, more consumer spending. Financial markets are looking for signs that the Federal Reserve will begin raising interest rates out of concerns over inflation.
Comment on US consumer spending dips 0.1 percent
By MARTIN CRUTSINGER, AP Economics Writer, Seattle Post-Intelligencer: Business
Fri, 08/29/2014 - 6:49am
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