Consumer Spending Rises Modestly in July

U.S. consumers dipped into savings to fund modestly higher spending in July as incomes grew at their slowest pace since December, the government said in a report that economists called deceptive. Economists said the income data were skewed by farm subsidies and consumption depressed by hot weather. They also noted that despite the muted income growth, wages and salaries--a major part of incomes--grew at the fastest pace since January. The Commerce Department said consumer spending rose at a slower-than-expected 0.4% in July to a seasonally adjusted annual rate of $6.2 trillion after a 0.3% gain in June. Despite July’s muted spending growth, outlays surpassed income growth, which increased at a slower-than-expected 0.2% to $7.5 trillion. That was the slowest gain in incomes since last December, when they were flat. Economists noted that wages and salaries, which account for 60% of total income, rose a strong 0.7% in July after gains of 0.5% in May and June.