U.S. consumer spending, a crucial driver of the American economy, cooled in June in line with most analysts' forecasts amid a nagging housing market slump, the Commerce Department said July 31. Consumer spending increased 0.1% last month from May, after it had risen a revised 0.6% in May.
Most economists had expected spending to moderate as the economy tries to regain momentum amid the housing downturn and as consumers are buffeted by high gasoline prices.
The report also showed that consumer income increased 0.4% in June from May, matching its gain of the prior month. The gain in income was slightly weaker than most analysts had anticipated.
The government said inflation, as measured by the personal consumption expenditures price index, rose 0.1% in June from May.
Core inflation, which strips out volatile food and energy prices and is judged by the Fed to be a more accurate barometer of prices, also rose 0.1% in the month, slightly weaker than most analysts had expected. It was the fourth straight month of a 0.1% rise.
Despite the moderation in spending last month, the economy expanded at a 3.4% growth rate in the second quarter, according to a government report last week. That was a marked difference to the tepid 0.6% pace recorded in the first three months of the year.
Copyright Agence France-Presse, 2007