U.S. Household Income Jumped in July as Spending Slowed
U.S. household income rose rapidly last month as the government handed out enhanced tax breaks for parents, priming the economy for stronger growth once the Delta variant subsides.
The 1.1% gain in household income, reported Friday by the Commerce Department, was the biggest jump since March and caught many analysts by surprise. It was largely due to an expanded child tax credit included in a $1.9 trillion pandemic-relief package passed by Congress this spring. The gain in income poured even more cash onto Americans’ already high savings.
Meantime, growth in consumer spending slowed last month to 0.3%—less than a third June’s spending increase of 1.1%. Economists believe the Delta variant, a highly contagious strain of Covid-19, is to blame for the slower growth. Consumer fears of infection, new business restrictions and mask mandates are likely…