WASHINGTON (AP) — The government says American consumers stepped up their spending by a modest two-tenths of one percent last month. It’s a weaker-than-expected performance, and it’s causing economists to say there will probably be less of a rebound in economic growth than they had anticipated during the current quarter.
The small increase in spending in May followed an April in which there was no gain.
Income rose by a solid four-tenths of a point last month, slightly better than the April advance.
The small spending increase was just half the size that analysts had been expecting. Some are saying that unless June shows a very large gain, spending may not provide as much support to the economy in the second half of the year as they had been expecting.
Paul Dales of Capital Economics says consumer spending may end up rising at an annual rate of 1.7 percent in the current quarter — and he says that “wouldn’t be much of a rebound” from the sluggish one-percent growth in spending in the first quarter.
Consumer spending accounts for 70 percent of the nation’s economic activity.
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APPHOTO NYBZ105: In this June 5, 2014 photo, Conquisia Tyler, right, gives change to a customer at Sam’s Club in Bentonville, Ark. The Commerce Department releases personal income and spending for May on Thursday, June 26, 2014. (AP Photo/Sarah Bentham) (5 Jun 2014)
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