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Business Title: Consumer Spending Rises in July, Beats Forecast Consumer spending climbed more than forecast in July as Americans dipped into savings to buy cars and cool their homes, showing the biggest part of the economy is holding up. Purchases rose 0.8 percent, the biggest gain since February, after a 0.1 percent decline the prior month, Commerce Department figures showed today in Washington. The median estimate of 74 economists surveyed by Bloomberg News called for a 0.5 percent increase. Incomes grew 0.3 percent, pushing the savings rate to a four-month low. Industry data showed autos sold at the fastest pace in three months as supply constraints from Japan’s March earthquake began to ease, while outlays on services, which includes utilities like electricity and gas, climbed at the fastest pace since December 2009. Spending may cool as a 17 percent plunge in the Standard & Poor’s 500 Index from July 22 through Aug. 8 sent consumer confidence tumbling this month. “Income and spending grew at a healthy pace in July, but it was before the confidence shock hit in early August, so it doesn’t tell us much about what spending will look like,” Michelle Meyer, a senior economist at Bank of America Corp. in New York. Stock-index futures held earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing next month increased 1.1 percent to 1,189.1 at 8:36 a.m. in New York. Treasury securities fell, sending the yield on the benchmark 10- year note up to 2.24 percent from 2.19 percent late on Aug. 26. Projections for spending in the Bloomberg survey ranged from increases of 0.2 percent to 0.8 percent. The Commerce Department revised the June spending figure from a previously reported 0.2 percent decline. The gain in incomes in July followed a 0.2 percent increase the prior month that was larger than previously reported. The July increase matched the median forecast of economists surveyed. according to the Bloomberg survey. Wages and salaries rose 0.4 percent in July after a 0.1 percent increase a month earlier. Because incomes rose less than spending, the savings rate fell to 5 percent, the lowest level since March, from 5.5 percent in June. Cars and light trucks sold at a 12.2 million seasonally adjusted pace of in July, up from 11.4 million in June, according to industry data. The rate trails the 12.6 million average pace through the first half of the year, according to Autodata Corp. Deliveries at Detroit-based General Motors Co. climbed 7.6 percent from the same month in 2010. Retailers, including Macy’s Inc. (M) and Limited Brands Inc., reported July sales that exceeded analysts’ estimates. Purchases at Macy’s rose 5 percent, surpassing the 4.4 percent average projection compiled by Retail Metrics Inc. Limited, operator of the Victoria’s Secret chain, posted a gain of 6 percent from a year earlier. Today’s report also showed inflation accelerated from a year ago. The gauge tied to consumer spending patterns increased 2.8 percent from July 2010, following a 2.8 percent gain in the 12 months ended in June. The Fed’s preferred price measure, the so-called core inflation reading that excludes food and fuel, rose 1.6 percent in July from a year earlier, compared with the 1.4 percent advance in June. It rose 0.2 percent in July from the prior month. Today’s report also showed that spending adjusted for inflation figures, which are used to calculate gross domestic product, climbed 0.5 percent, the biggest gain since December 2009. Price-adjusted purchases of durable goods like cars advanced 2 percent, the most since October. Outlays on services increased 0.5 percent, the most since December 2009. Temperatures soared across the U.S., with July records in Texas and Oklahoma, according to the National Climatic Data Center. Last month, temperatures were “above normal” or “much above normal” in 41 of the 48 contiguous U.S. states, it said. The economy grew at a 1 percent annual rate from April through June after a 0.4 percent gain in the prior quarter, capping the weakest six months of the recovery that began in mid- 2009, Commerce Department figures showed last week. Household spending rose 0.4 percent, the weakest performance since the last quarter of 2009. A slump in confidence threatens to cut the gains short. The Thomson Reuters/University of Michigan index of consumer sentiment fell in August to the weakest reading since November 2008. Lowe’s Cos., the second-largest U.S. home-improvement retailer, said profit in its fiscal 2011 will be less than it previously projected as sales drop at stores open more than a year. “Recent headlines regarding slowing growth and the U.S. credit rating downgrade underscore the continued weakness in the U.S. economy,” Robert A. Niblock, chairman and chief executive officer, said on an Aug. 15 conference call. “The volume of negative news and the unsettling impact on equity markets is having a significant effect on an already fragile consumer mindset.” “It is clear that the recovery from the crisis has been much less robust than we had hoped,” Federal Reserve Chairman Ben S. Bernanke said last week at the central bank’s annual Jackson Hole, Wyoming, symposium. “Economic growth has, for the most part, been at rates insufficient to achieve sustained reductions in unemployment.” The jobless rate held at 9.1 percent in July, while payrolls grew by 117,000 workers, according to figures from the Labor Department. They rose at an average 179,000 in the first four months of the year. The economy also failed to create enough jobs in August to trim unemployment, economists in a Bloomberg survey said before a Labor Department report due Sept. 2.
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#1. To: Brian S (#0)
The only thing noteworthy in the entire article.
Proxy IP's are amusing.....lmao
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