WASHINGTON - Consumer spending in the U.S. climbed in July for the first time in three months as the biggest part of the economy struggled to overcome a jobless rate hovering over 8 percent.
Purchases increased 0.4 percent after being little changed in June, Commerce Department figures showed today in Washington. The median estimate of 76 economists surveyed by Bloomberg called for a 0.5 percent gain in so-called nominal sales. Incomes climbed 0.3 percent for a third month.
Consumers bounced back last month after scrimping in June and May, which may set the stage for faster third-quarter economic growth. Even so, costlier gasoline and a jobless rate that has exceeded 8 percent since early 2009 threaten to limit spending gains in the second half of 2012.
“The quarter is getting off to a decent start,” said Gus Faucher, a senior economist at PNC Financial Services Group Inc. in Pittsburgh, who correctly forecast the increases in purchases and income. “The consumer’s situation is slowly improving, but the job growth isn’t there to support really big gains in future spending.”
Projections for spending ranged from increases of 0.2 percent to 0.7 percent.
Another report showed more Americans than forecast filed applications for unemployment benefits last week, a sign that progress in the labor market is faltering amid a plodding economic recovery.
Jobless claims were little changed at 374,000 in the week ended Aug. 25, matching the upwardly revised figure from the prior week, the Labor Department reported today in Washington. The median forecast of 50 economists surveyed by Bloomberg News called for 370,000. The four-week moving average, a less volatile measure, climbed to a six-week high.
Stock-index futures held earlier losses after the reports. The contract on the Standard & Poor’s 500 Index maturing in September fell 0.4 percent to 1,402 at 8:50 a.m. in New York.
Incomes were revised down for June from a previously reported 0.5 percent gain, today’s report showed. The July increase matched the 0.3 percent advance median estimate of economists surveyed.
Because spending rose more than incomes, the saving rate fell to 4.2 percent from 4.3 percent in June, the highest level in a year.
The spending figures used to calculate gross domestic product, which removes the effects of inflation, showed purchases climbed 0.4 percent in July. They dropped 0.1 percent in June and fell less than 0.1 percent in May.
PBN is now accepting applications for its newest award program and event for RI & Bristol County to celebrate the Manufacturing Renaissance that is evolving regionally and across the country. The deadline for applications is March 20th.
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.