August 29, 2003
Personal Spending, Income Up in July
By REUTERS
Filed at 9:09 a.m. ET
WASHINGTON (Reuters) - U.S. personal expenditures surged, the government said on Friday, supplying further evidence of a solidifying economic recovery, although personal income grew slightly less than expected.
The Commerce Department said consumer spending, which comprises about two-thirds of U.S. economic activity, grew 0.8 percent in the month, in line with expectations of analysts polled by Reuters. June personal spending was revised up to 0.6 percent from 0.3 percent.
Personal income grew 0.2 percent in July, less than the 0.3 percent growth rate expected by economists.
Disposable personal income -- personal income after taxes and other bills -- rose by 1.5 percent, boosted by the Bush administration's $350 billion tax cut implemented earlier this year, Commerce said. Without the tax cut, disposable income would have gained only 0.2 percent, the government said.
The report shows Americans were willing to spend the money the tax cut put in their wallets. The government mailed checks for an expanded child tax credit in July and employers began adjusting the amount they deduct from paychecks for taxes the same month.
Personal saving as a percent of personal income rose to 3.8 percent in July, up from 3.1 percent in June. |
