Consumer spending in the United States increased for the second month in a row in June, creating recovery spending in the third quarter, although recovery may be limited by a revival in COVID-19 cases and an end to expanded unemployment benefits.
The Commerce Department said on Friday that consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 5.6 percent last month after a record 8.5 percent jump in May as more businesses reopened. Consumers have stepped up purchases of clothes and shoes. They also spend more on health care, meals and hotel and motel accommodation.
Economists polled by Reuters predicted that consumer spending would rise by 5.5% in June. When adjusted for inflation, consumer spending rose 5.2% last month after rising 8.4% in May.
The data was included in Thursday̵
As inflation rose in June, inflation-adjusted consumer spending emerged from the deep hole in April, although it remained below pre-pandemic levels. This sets the cost for a higher growth trajectory in July-September.
But the explosion of COVID-19 infections, especially in densely populated areas of the South and West, where authorities in severely affected areas are closing business again and halting the pause, again calls into question the extent of the expected jump in consumer spending for the third quarter.
In addition, tens of millions of unemployed Americans will lose $ 600 in additional weekly unemployment benefits after the White House and Congress failed to reach an agreement to extend the supplement, which allowed them to pay rent and buy food among other expenses.
Stock index futures were set to open higher after technology titans Apple, Amazon.com and Facebook posted a quarterly revenue blow, helping to keep the nerves of spreading the new coronavirus. The dollar was largely equal to a basket of currencies. US long-term fund prices have fallen.
In June, consumer spending increased by 6.4% growth in purchases of goods. Expenses for services increased by 5.2%.
Wages fell 1.1% last month after falling 4.4% in May, when state aid payments slowed. Wages rose 2.2% after recovering 2.6% in May. The savings rate fell to a still high 19% from 24.2% in May.
Monthly inflation picked up in June, driven by food and energy prices and services, although the trend remained subdued. The Consumer Price Index (PCE) excluding volatile food and energy components rose 0.2%, in line with May’s profit.
For the 12 months to June the so-called The main PCE price index rose 0.9% after rising 1.0% in May. The core PCE index is the preferred measure of inflation for the Federal Reserve of 2%.