Consumer Spending in U.S. Rebounds as Incomes Increase
Source: Bloomberg
By Shobhana Chandra - Jun 27, 2013
Consumer spending in the U.S. rebounded in May following the largest drop in more than three years, a sign the biggest part of the economy will underpin growth this quarter.
Household purchases, which account for about 70 percent of the economy, rose 0.3 percent after a 0.3 percent decline the prior month that was the biggest since September 2009, Commerce Department figures showed today in Washington. Incomes (PITLCHNG) advanced 0.5 percent, more than projected.
The report may help ease concern about the outlook for the economic expansion after data yesterday showed household purchases rose at a slower pace than previously estimated in the first quarter. Rising home prices and an improving job market, combined with faster income gains, may help to accelerate spending in the last six months of 2013.
“Consumer spending will continue to be the driver of the recovery,” said Tom Simons, an economist at Jefferies LLC in New York, who accurately predicted the gain in purchases. “The second half looks better. The labor market is continuing to improve. The housing rebound will help as well.”
Read more: http://www.bloomberg.com/news/2013-06-27/consumer-spending-in-u-s-rebounds-as-incomes-increase.html
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