Automobiles restrain U.S. consumer spending, monthly inflation slowing
- Consumer spending increases 0.3% in July; June revised up
- Personal income jumps 1.1%; saving rate rises to 9.6%
- Core PCE price index climbs 0.3%; up 3.6% year-on-year
- Goods trade deficit narrows 6.2%; inventories increase
WASHINGTON, Aug 27 (Reuters) – U.S. consumer spending slowed in July as a decline in motor vehicle purchases due to shortages offset a rise in outlays on services, supporting views that economic growth will moderate in the third quarter amid a resurgence in COVID-19 infections.
But the foundation for the recovery remains solid, with the report from the Commerce Department on Friday showing wages rising and Americans further boosting savings. Inflation appears to have peaked, which could preserve households’ purchasing power. Businesses are also restocking and exporting more goods, suggesting a slowdown in growth this quarter could be temporary.
“There are clear downside…