US consumers spend 0.3 per cent more in May as their income rises 0.5 per cent

WASHINGTON – U.S. consumers spent more in May as their income increased at the fastest pace in three months, gains that could help economic growth rebound.

The Commerce Department says consumer spending rose 0.3 per cent last month. That made up a 0.3 per cent decline in April, which was the biggest drop since the fall of 2009. The rise in spending was due in part to a 0.9 per cent increase in purchases of durable goods such as autos.

Income rose 0.5 per cent in May, the biggest gain since February and much better than the 0.1 per cent April increase. Even with the gain, after-tax income is up just 1.1 per cent over the past year after taking inflation into account.

Consumer spending is important because it drives 70 per cent of economic activity.