Aug 2, 2011
U.S. consumer spending stalled in June as a drop in hiring caused households to cut back, according to the Commerce Department in a report on Tuesday.
In June purchases June rose 0.1% after not much change, while personal incomes likely increased 0.2% in June, the smallest gain in seven months.
Because of the lack of jobs in combination with wage gains have failed to keep pace with inflation, it raises the risk of further cut backs on consumer spending that accounts for 70% of the world's largest economy.
The Gross domestic product increased to a 1.3% annually rate from April in the course of June after a 0.4% gain in the previous quarter that was less than what was earlier expected. Household spending increased 0.1%, the weakest performance since the Q2 of 2009, the end of the last recession.
Federal Reserve Chairman Ben S. Bernanke said in semi-annual testimony to Congress on July 13, "Wages are very stagnant and that's affecting consumer spending and consumer confidence. There is also ongoing uncertainty about the durability of the recovery."
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