US Consumer Spending July 2007

The US Commerce Department reported yesterday that consumer spending rose by 0.4 percent in July, double the June increase. The spending was supported by a solid 0.5 percent rise in incomes, the best showing in four months.

The gain in spending was in line with analysts expectations, although the increase in incomes was nearly double what many had expected. However, many observers have cautioned that the July increases could be temporary given recent weakness in consumer confidence caused by the prolonged slump in housing and the past few weeks of financial market turbulence. Here is the chart for consumer spending:



And here's the chart for month by month changes in personal income growth:



and here is the same information showing the annual change over the previous year.