Consumer Spending Trends Upward

The latest figures from the Commerce Department show that consumer spending is improving as wages continue to raise, Bloomberg reported.

The 0.3 percent advance mirrored the increase seen in June, and of the 77 economists Bloomberg surveyed, the projection was a 0.4 percent increase. In general, spending has been trending upward, and the economy has been improving — but consumer sentiment isn’t quite keeping up at the same rate. The figures also show a momentum in the economy that has continued into the second part of 2015.

“The consumer is pretty much chugging along,” Tom Simons, an economist at Jefferies LLC in New York, told Bloomberg. “It’s clearly encouraging to see the wage gain. We definitely need more of that to see a sustained acceleration in consumption.”

In general, when adjusted for inflation, consumer purchases also rose 0.2 percent, which was little change from the month prior. Economic growth increased 3.7 percent in the second quarter, which was up from a previously reported 2.3 percent, according to Commerce Department data released late last week.

U.S. consumer confidence dipped slightly in August, according to results from the University of Michigan’s Survey of Consumers index of sentiment.

“Now is the time to more carefully monitor consumer sentiment in case we do see a fallout from the international problems, but I don’t expect it,” Richard Curtin, director of the Michigan Survey of Consumers, told Bloomberg. He also noted that lower prices are “starting to have an impact on their spending decisions because they now no longer expect gas prices to quickly rebound to the previous levels.”

As noted above, while Americans are still wary of the economy, that doesn’t mean that consumer spending has dipped. In fact, Bloomberg’s report points out that retail sales increased 0.6 percent in July, and the Commerce Department recently revised the previous two months’ reports to be higher, too. This has been attributed to employment rates rising as the job market continues to improve.

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