(WASHINGTON) — U.S. consumer spending grew 0.6% in July, a healthy gain that suggests American shoppers are largely ignoring concerns about trade tensions and driving the economy forward.
The Commerce Department said Friday that personal incomes rose just 0.1%, the smallest gain in 10 months. With spending ahead of incomes, the savings rate fell to 7.7%, the lowest since last November, but still a solid figure by historical standards.
With trade fights discouraging business investment and cutting into exports, consumers are increasingly important to the U.S. economy. Household spending was the principal driver of growth in the April-June quarter, when spending increased by the most in five years.
“The U.S. consumer continues to display great vitality, emboldened by solid income growth and a large savings buffer,” said Lydia Boussour, senior U.S. economist at Oxford Economics.
Consumers remain optimistic about the economy, but that could change. Consumer confidence was high in Augus..Read More