US consumer spending rose for the second straight month in June, setting consumption up for rebound in the third quarter, although the recovery could be limited to the end of the resurgence and expanded unemployment benefits in Kovid-19 cases.
The Commerce Department said on Friday that consumer spending, which accounted for more than two-thirds of US economic activity, reopened more business after a record 8.5% growth in May, with an increase of 5.6% last month. Consumers shop for clothes and shoes. They spent more on healthcare, food, and hotel and motel accommodation.
Economists forecasted by Reuters had estimated that consumer spending would rise 5.5% in June. When adjusted for inflation, consumer spending rose 5.2% after rising 8.4% in May last month.
The data was included in Thursday’s advance GDP report for the second quarter, which showed the economy shrinking to a record 32.9% annual rate, as consumer spending grew at a historic 34.6% pace.
With the June increase, inflation-adjusted consumer spending has pulled out of April’s deep hole, though it remains below its pre-epidemic level. It spends the July – September quarter heading the high growth trajectory.
But the explosion of Kovid-19 infections, particularly in densely populated south and west regions where officials in hard-hit areas are closing and reopening business, is suspected of a third-quarter expected jump in consumer spending Are doubting
In addition, millions of unemployed Americans lost $ 600 in additional weekly unemployment benefits on Friday by failing to reach an agreement by the White House and Congress to expand the supplement, allowing them to pay rent and food, among other expenses. Got permission to buy.
Stock index futures were set to open higher after tech titans Apple, Amazon.com and Facebook posted blitout quarterly earnings, which helped to keep the veins at bay on the spread of novel coronaviruses. The dollar was largely flat against a basket of currencies. Long-term US Treasury prices fell.
In June, consumer spending increased by 6.4% in goods purchases. Outlay on services increased by 5.2%.
Personal income declined 1.1% after a 4.4% decrease in personal income in May as government welfare payments slowed. Wages rose 2.2% after a 2.6% rebound in May. The savings rate fell from 24.2% to 19% in May.
Driven by the prices of food and energy goods and services, monthly inflation persisted in June, although the trend remained muted. The Personal Consumption Expenditure (PCE) price index increased 0.2%, excluding volatile food and energy components, which corresponded with the May gain.
In the 12 months through June, the so-called core PCE price index rose 0.9% after rising 1.0% in May. The core PCE index is the preferred inflation measure for the Federal Reserve’s 2% target.