August 30, 2004

STRONG GROWTH WITH NO INFLATION = 50:

Consumer Spending Rebounds Sharply (Reuters, August 30, 2004)

U.S. consumer spending rebounded sharply July, government data showed on Monday, erasing the disappointment of June and bolstering hopes that the U.S. economy has recovered from its recent soft spot.

Personal spending rose 0.8 percent, more than making up for a revised 0.2 percent fall in June, the Commerce Department said. The improvement in consumption was actually even larger since June's spending had been initially reported as a 0.7 percent decline.

But personal income advanced at a more modest pace than expected, posting a 0.1 percent rise compared with a 0.2 percent gain the previous month. July's advance was the weakest reading since November 2002. [...]

In striking evidence that U.S. inflation is well under control, both the price index for consumer purchases and core prices, one of the Federal Reserve's favorite measures of inflation, were unchanged last month.

Posted by Orrin Judd at August 30, 2004 11:14 AM
Comments

Gas prices in July were down from their spike upwards in June, so spending on other items went up. Gas prices were up in the early part of August, so I'd expect less rosy numbers to come out at the end of September. And the price of oil has been dropping as of late on world markets, which should translate into a gas price drop for consumers in September, leaving more disposable income for ohter items. So when the September report comes out just before Election Day...

Posted by: John at August 30, 2004 1:04 PM
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