Tags: Consumer | Spending | economy | us

Consumer Spending Falls to Weakest Level in Six Months

Friday, 29 Jun 2012 08:50 AM

Consumer spending was flat in May for the first time in six months as Americans eased off on vehicle purchases amid tepid wage growth, but subsiding inflation pressures should keep demand supported.

The Commerce Department said on Friday April's consumer spending was revised down to show only a 0.1 percent rise instead of the previously reported 0.3 percent gain.

Weak consumer spending in May also reflected tepid sales at service stations as the pump price of gasoline fell from lofty levels early in the year.

Spending rose 0.1 percent after adjustment for inflation. Consumer spending accounts for more than two-thirds of U.S. economic activity. The small rise could cause economists to tweak their second-quarter forecasts for real consumer spending - currently in a range of 2 percent to 2.3 percent.

Spending grew at a 2.5 percent annual rate in the first quarter, with the overall economy expanding at a modest 1.9 percent rate.

Weak gasoline prices put downward pressure on inflation. A price index for personal spending fell 0.2 percent in May, the first decline in a year. The index was flat in April.

In the 12 months through May, the PCE index was up 1.5 percent, the smallest increase since January last year. It increased 1.9 percent in April.

© 2017 Thomson/Reuters. All rights reserved.

 
1Like our page
2Share
210
2012-50-29
Friday, 29 Jun 2012 08:50 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved