US consumer spending up 0.5 per cent in June, best showing in 4 months, but income slowed

WASHINGTON – Consumers increased their spending in June at the fastest pace in four months even though their income growth slowed.

The Commerce Department says consumer spending rose 0.5 per cent in June compared with May, when spending was up 0.2 per cent. It was the best gain since a 0.7 per cent rise in February. Income growth slowed to a 0.3 per cent rise in June, weaker than May’s 0.4 per cent gain.

The hope is that strong consumer spending will help boost a lacklustre economy to stronger growth in the second half of this year. But for that to happen, economists say income growth needs to accelerate.

Spending on non-durable goods was up 1.3 per cent, reflecting in part rising gas prices, while demand for durable goods rose 0.8 per cent, reflecting strength in auto sales.