U.S. Personal Spending +1.0% in June -- Update
By Amara Omeokwe
U.S. households boosted spending by 1% in June as consumers
shelled out more on services at the start of the summer, but a
current upswing in Covid-19 cases related to the Delta variant is
injecting uncertainty into the economic outlook.
Personal-consumption expenditures--a measure of household
spending on goods and services--increased last month, the Commerce
Department reported Friday, beating economists' expectations for a
0.7% rise. That followed a downwardly revised 0.1% drop in May,
when consumers pulled back on purchases of goods but boosted
spending on services.
Friday's report also showed Americans' personal income rose 0.1%
in June. Still, rising inflation and the latest surge in virus
cases could affect future spending trends.
Inflation has accelerated this year as the economy faces
supply-chain bottlenecks and materials shortages. Friday's report
showed that the core personal-consumption expenditures price
index--a measure of inflation that excludes often-volatile prices
for food and energy--was up 3.5% in June from a year ago, compared
with a 3.4% yearly increase in May.
Americans have been doling out money to resume activities
outside the home since state and local governments eliminated
Covid-19 restrictions earlier this year, a trend that has
particularly benefited service-sector industries, such as
restaurants and travel. They had been battered earlier in the
pandemic as Americans stayed indoors and shifted spending toward
household items and other goods.
The Delta variant has prompted some local governments to
reimpose mask mandates, and the Centers for Disease Control and
Prevention this week recommended that vaccinated Americans in
certain areas wear masks indoors. Some businesses have announced
new restrictions or delayed office-reopening plans. Many economists
so far don't think the developments will significantly hamper
growth, with businesses and consumers adapting to each phase of the
Write to Amara Omeokwe at firstname.lastname@example.org
(END) Dow Jones Newswires
July 30, 2021 09:09 ET (13:09 GMT)
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