Consumer spending softens in June, income growth ticks up
WASHINGTON (8/4/15)--Real spending flat-lined in June, as consumers beefed up savings and held off on buying new cars, according to data released Monday by the Bureau of Economic Analysis (BEA).
Personal income, meanwhile, jumped 0.4% in June, outpacing spending and allowing consumers to put away a little more cash. The savings rate rose to 4.8% from 4.6% during the month, the BEA said.
“Personal income growth held steadfast through the second quarter of 2015, but could be doing better to spur greater acceleration in spending,” said Bernard Yaros, Moody’s analyst (Economy.com Aug. 3).
Nominal personal income growth picked up by 0.5% on a monthly basis after a 0.4% acceleration the previous month.
Wage and salary growth continued to disappoint, rising 0.2%, with both private sector and government wages decelerating.
Spending was driven by services, while durable goods spending fell thanks to a drop in new-vehicle sales, according to Moody’s.
“Spending is on a somewhat weaker trajectory than previously thought,” said Scott Hoyt, Moody’s analyst (Economy.com). “Real spending growth was revised lower so far in 2015, with downward revisions to gains in January, March and May, only partially offset by an upward revision to April.”