U.S. Economic Indicators Inch Up in June : Growth: Industrial index hits a six-year high, but other measures lag.
A key barometer of manufacturing activity edged up to its highest level in six years, but other economic indicators--including income growth, consumer spending and construction outlays--were weaker than expected.
The National Assn. of Purchasing Management said Monday that its industrial index hit 57.8 in July, the highest since July, 1988. But analysts noted that the increase, based on a nationwide survey of 300 industrial companies, was only marginally changed from 57.5 in June.
“The purchasing managers index continues to indicate that industrial activity is rising at a healthy pace but not accelerating,” said economist Bruce Steinberg of Merrill Lynch & Co. in New York.
The Commerce Department reported Monday that personal income growth slowed to 0.1% in June, though it was the fifth straight advance, including a 0.4% increase in May.
The department also said consumer spending rose 0.4% for a second consecutive month, but analysts attributed much of that growth to the blast of air conditioners. They had expected spending to advance 0.5%.
“This morning’s statistics on personal income and consumer spending were weaker than anticipated and confirmed the slowdown in income and spending that took place during the second quarter,” said economist Marilyn Schaja of Donaldson, Lufkin & Jenrette Securities Corp.
In another report, the Commerce Department said construction spending inched up 0.2%, held in check by the first decline in single-family outlays in 14 months.
In its report on incomes and spending, the government said personal income rose to a seasonally adjusted annual rate of $5.664 trillion in June from $5.659 trillion.
Consumer spending, which makes up two-thirds of the nation’s economic activity, totaled $4.602 trillion, up from $4.586 billion in May.
Disposable income--income after taxes--rose 0.1% in June after a 1% increase in May.
Wages and salaries increased $3.2 billion in June, much less than the May gain of $19.1 billion.
Spending on long-lasting items such as cars and appliances slipped 0.3% in June to a seasonally adjusted annual rate of $578.6 billion. Spending on non-durable goods such as food and fuel inched up 0.2% to $1.379 trillion.
But spending on services, including electricity for air conditioning, was up 0.6% to $2.645 trillion.
Personal Income and Spending
Seasonally adjusted annual rate, in trillions of dollars:
July 1994: 5.66
July 1994: 4.60
Source: Commerce Department