Posted on 08/30/2004 6:12:16 AM PDT by Cagey
WASHINGTON (Reuters) - U.S. consumer spending rebounded sharply July, government data showed on Monday, erasing the disappointment of June and bolstering hopes that the U.S. economy has recovered from its recent soft spot.
Personal spending rose 0.8 percent, more than making up for a revised 0.2 percent fall in June, the Commerce Department said. The improvement in consumption was actually even larger since June's spending had been initially reported as a 0.7 percent decline.
But personal income advanced at a more modest pace than expected, posting a 0.1 percent rise compared with a 0.2 percent gain the previous month. July's advance was the weakest reading since November 2002.
Analysts polled by Reuters had forecast consumption to rise 0.7 percent and income to gain 0.5 percent after strong retail and car sales last month indicated that consumers had overcome their reticence of June. That is good news for third-quarter growth, after a slowdown in the economy's expansion in the second quarter.
Stripping out the effects of inflation and taxes, disposable income rose 0.1 percent, the Commerce Department said.
In striking evidence that U.S. inflation is well under control, both the price index for consumer purchases and core prices, one of the Federal Reserve's favorite measures of inflation, were unchanged last month.
Spending on durable goods, which include costly items like cars, jumped 4.1 percent, erasing June's revised 3.2 percent drop. This had been initially reported as a 5.9 percent fall. Non-durable goods spending advanced 0.2 percent and June's previously reported 0.3 percent decline was revised to show a 0.2 percent rise.
A rebound in spending had been heralded by a pick-up in both car and retail sales last month and analysts see this laying the foundation for higher growth in the second half of the year after the economy hit a rut between April and June.
Doomed!!
Nice news to kick off the GOP's convention.
HORROR!
Probably because of all the dang furniture we bought in July.
It's Bush's Fault!
However, the market expected 0.5% rise. Seems like consumers are borrowing to spend more. Sort of like what the Fed is doing. Looks like the US$ is going to take a huge dive after the election!
Sooner if Soros gets involved.
I can hear Howard Dean saying, "Not only is the timing of this suspicious, but I think the Bush administration is trying to use good news about the economy to bolster their ratings. Now, understand that I'm only just saying... It doesn't mean that I believe it. But don't you find this interesting?"
I feel sick and nauseous every time I enter into that man's mind...
And the stupid appliances we bought for our new house....as far as this good economic news goes, YOU'RE WELCOME!
I know, my wife has been shopping! Oh has she ever.
"Probably because of all the dang furniture we bought in July."
and I'll be doing my part soon as the old washing machine is sputtering.
That and our new car.
It is really great to see the press and the libs (as if there is any difference!) go nuts at any hint of good economic news. In my product segment within my company, we will hit 100% of 2004 sales targets by the end of this month and our production is sold out for the rest of the year.
Guess all that rain drove the east coasters to the shopping malls........WAY TO GO, AND THANKS!!!
TDIDS
(Gratuitous and necessary)
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