Consumer Spending Up 1 Percent
By JEANNINE AVERSA 08/30/2002 07:34:58 EST
WASHINGTON (AP) - Consumers, the mainstay of the economy, splurged in July, increasing their spending by 1 percent, the largest advance in nine months, the government reported Friday.
Free-financing, especially on cars, discounted merchandise and other incentives motivated shoppers to spend. Warm weather in some parts of the country also induced people to hit the malls.
While the increase in consumer spending, reported by the Commerce Department, provided a dose of good news for the struggling economic recovery, another figure in Friday's report seemed less encouraging.
Americans' incomes, which includes wages, interest and government benefits, was flat in July, reflecting the stagnant jobs market. Wages and salaries actually dipped by 0.2 percent.
Income growth is the fuel for consumer spending, which accounts for two-thirds of all economic activity in the United States.
The income picture was weaker than the 0.2 percent increase many analysts were predicting. But the spending side was stronger than the 0.7 percent advance that was forecast. |
