Those 3.5 – 4.0 percent predictions for second-quarter GDP growth look a bit more tenuous.
Personal spending, reflecting what Americans pay for everything from groceries to doctor visits, rose a seasonally adjusted 0.2% in May from a month earlier, the Commerce Department said Thursday. The rise was linked entirely to higher prices and came after a flat reading of spending in April. Adjusted for inflation, spending dipped.
Personal income—a measure of Americans’ income from wages, investment and government aid—grew 0.4% in May. Incomes have grown for five consecutive months, but Americans are putting a greater share into savings.
Economists surveyed by The Wall Street Journal had predicted both personal spending and income would rise a 0.4% pace in May.
The report offered the latest clues the recovery got back on track in the spring after a big contraction in economic output during the first quarter. Stronger job gains in recent months appear to be lifting household incomes, boosting overall economic growth.
But the weakness in consumer spending, if sustained, could restrain economic growth in the coming months. Consumer spending is the biggest piece of economic output in the U.S.
Uh, weakness in consumer spending also restrains reported economic growth right now, guys.