Washington, DC, United States (4E) – Household spending in the U.S. declined in July, an indication that consumers are still cautious and continue to hold back on spending that could hurt economic growth in the second half of 2014.
Personal spending, a gauge of how much Americans pay for everything from health care to grocery goods, fell 0.1 percent in July from the prior month in seasonally adjusted terms, according to the Commerce Department report released Friday. The decline was the first since January. Consumer spending rose 0.4 percent in June.
Personal income – a reflection of income from wages, government aid and investment — increased 0.2 percent in July, which marks the smallest monthly gain for this year. Income was revised up to a 0.5 percent gain in the previous month, from the initial reading of 0.4 percent increase.
Economists polled by The Wall Street Journal had forecast personal spending to edge higher by 0.1 percent and income to climb 0.3 percent in July.
In July, U.S. consumers spent less on goods, with big ticket-ticket items like appliances and automobiles contributing the most to the decline. At the same time, spending on services, such as health care, housing and utilities stayed flat in July.