Consumer spending in the U.S. rose more than forecast in July, exceeding gains in incomes and indicating the economy may avoid slipping back into a recession.
Purchases rose 0.4 percent, the most since March, after little change the prior month, Commerce Department figures showed today in Washington. Incomes climbed 0.2 percent, less than projected, and the savings rate dropped.
Disposable incomes, or the money left over after taxes, dropped for the first time since January after adjusting for inflation, showing how the lack of jobs may prevent spending from strengthening. Companies from Intel Corp. to J. Crew Group Inc. are cutting forecasts as unemployment and flagging confidence prompt households to scale back.
Full story: Consumer Spending in U.S. Tops Forecast, Incomes Lag – Bloomberg