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Consumer spending dips to three-year low in June
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August 08, 2004
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High energy prices and a sluggish job market combined in June to nudge consumer spending to a decline of 0.7 percent, even lower than the forecast 0.1 percent decline, according to a report released by the Commerce Department on Tuesday. It is the largest spending dip in three years.
Consumers' apparent reluctance to spend came in the wake of a robust 1 percent rise in spending reported for May. Analysts suggested the anemic showing reflected a disappointing number of new jobs in June, for which 200,000 job creations had been predicted but fell short by half.
Wages decreased $2.7 billion after a $35 billion increase in May. Manufacturing payrolls went unchanged after a $5.1 billion increase the previous month, while service job payrolls dipped $3.2 billion after a $27.3 billion gain in May.
Automobile and other big-ticket purchases of durable goods showed the biggest drop in sales, declining 5.9 percent, in contrast to a 3.7 percent rise for May. Necessities such as food and clothing dipped 0.3 percent in June, following a 1.4 percent increase the previous month.
The report showed inflation moderated in June as prices rose 0.1 percent for the second month in a row, excluding food and energy costs.
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Source:
National Jeweler
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