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Strategies & Market Trends : The Thread II -- Ignore unavailable to you. Want to Upgrade?

To: SpinCity1 who wrote (3467)	7/2/2001 8:53:40 AM
From: SpinCity1	Respond to of 9026

Monday July 2 8:40 AM ET Personal Spending Rose 0.5 Percent in May WASHINGTON (Reuters) - Led by an upswing in demand for durable goods, U.S. consumer spending posted a healthy gain in May, the government said in a report on Monday that also showed a smaller rise in incomes and a decline in savings which could indicate the potential for slower economic growth ahead. The Commerce Department (news - web sites) said consumer spending rose by 0.5 percent in May to a $7.087 trillion annual rate, boosted by a 1.2 percent gain in expenditures for durable goods -- items such as refrigerators and autos intended to last three or more years. Income growth, however, was slower, increasing by 0.2 percent to an $8.632 trillion rate. The combination of faster spending and sluggish income growth dragged down the Commerce Department's gauge of savings. The personal saving rate, which measures saving as a percentage of disposable income, fell to negative 1.3 percent in May from a downwardly revised negative 1.0 percent in April. The May figure matched a record low seen in January. A negative saving rate means consumers spent more than they earned, either by drawing down assets or by borrowing. While consumer spending has been one of the sources of strength in an otherwise lackluster economy in recent months, economists warn that slower income growth and deteriorating personal balance sheets may dent spending ahead. The figures were off a bit from Wall Street projections. Analysts polled by Reuters had projected income rose by a larger 0.3 percent and spending advanced by a smaller 0.4 percent.