WASHINGTON — Consumer spending slowed in June as income growth turned in the weakest performance in seven months.
Spending edged up a tiny 0.1% compared to a 0.2% rise in May, the Commerce Department reported Tuesday. It was the weakest showing since spending increased a similar 0.1% in February. Incomes were flat in June following a 0.3% rise in May. It was the worst reading since incomes fell 0.1% in November.
Spending is closely watched because it accounts for 70% of economic activity. Even with the weakness in June, spending for the April-June quarter revived, helping to lift overall economic growth to a solid rate of 2.6% during the quarter. Economists believe solid job growth will keep economic growth at healthy levels this quarter.
Andrew Hunter, a U.S. economist with Capital Economics, said that the new report showed that consumer spending had lost some momentum at the end of the second quarter “which isn’t a particularly promising sign going into the third quarter.”