Income Climbs 0.4%; Spending Goes Up 0.7%

Americans’ personal incomes rose 0.4% in June while consumer spending shot up an even higher 0.7%, the largest spending gain since April, the government said today.

The Commerce Department said that the spending increase followed a 0.1% decline in May and a 0.8% rise in April.

The income advance followed identical 0.5% increases in both April and May.

Data for the previous months was revised to reflect the annual recalculation the Commerce Department performs on the income and spending statistics in conjunction with similar revisions to the gross national product report.

Durable Goods Sales Up

Personal consumption spending, which includes virtually everything except interest payments on debt, increased at an annual rate of $20.4 billion in June after a decline of $3.8 billion in May.

Purchases of durable goods, items expected to last three or more years, increased $9.8 billion in June, reversing a $7.8-billion decline in May. The swings in both months were attributed to auto purchases.

Purchases of non-durable goods fell at an annual rate of $2.9 billion, the second monthly decrease, while purchases of services were rising at an annual rate of $13.6 billion, compared to an increase of $5.9 billion last year.

Production Rate Slows

Wages and salaries, the key component in the income category, rose at an annual rate of $8 billion in June, down from an $11.1-billion May advance. Part of the slowdown came from a drop in the rate of increase at manufacturing plants, where payrolls were up $500 million following a much stronger $2.4-billion May advance.

The June and May increases in personal incomes were affected by large increases in retroactive payments for Social Security benefits and in government subsidy payments to farmers.

Americans’ disposable, or after-tax, income edged down a tiny 0.1% in June after rising a record 3.6% in May. The May increase, however, was merely a return to more normal levels following large tax payments in April.