U.S. consumers are spending slightly more as their incomes are rising modestly, official data showed on August 30, doing little to dispel fears about the health of the economy.
The Commerce Department said spending rose 0.4% in July as incomes rose 0.2%, broadly in line with forecasts.
"Spending growth was the fastest since March and the trend remains one of very modest growth," said Scott Hoyt of Moody's Economy.com.
Consumer spending is a key driver of economic growth, usually accounting for two-thirds of output.
Spending rose by $23.3 billion in July versus a drop of five billion dollars the month before.
According to Zach Pandl of Nomura Global Economics, the spending jump was linked to strong auto sales.
The Commerce Department revised downward its estimates of spending and income for June, which were seen as unchanged versus the previous month.
It also reported that the price index, one measure of inflation, increased 0.2%.
Copyright Agence France-Presse, 2010