U.S. consumer spending growth slows to 2.0 percent in June

Nathan Andrada – Fourth Estate Cooperative Contributor

Washington, DC, United States (4E) – American consumers were cautious about their spending in June, a signal that the economy is struggling to gain traction despite recent strengthening in hiring activity, according to government data released Tuesday.

On a seasonally adjusted basis, retail sales in the U.S. rose 0.2 percent in June from the previous month, the smallest gain since January, the Commerce Department report showed. Consumers increased spending on healthcare products, general merchandise and clothing but reduced spending on big-ticket items such as vehicles and furniture. Excluding auto sales, the figure climbed 0.4 percent.

Economists polled by the Wall Street Journal had estimated an increase of 0.6 percent in overall retail sales and a gain of 0.5 percent in sales excluding automobiles for June.

Purchases of building materials, which are closely connected to the housing market, dropped 1 percent. Sales at furniture stores slid 0.1 percent.

However, consumers spending picked up in other areas. Purchases at clothing stores jumped 0.8 percent, sales of food and beverages edged higher 0.4 percent and purchases of health-care products grew 0.9 percent. Sales at general merchandise stores increased 1.1 percent

Broader economic forces are preventing significant gains in the broader economy and consumer spending. Weak growth in income means many families have had limited money to spend after inflation, which has been rising recently.

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