U.S. consumer spending fell in June for the first time in almost two years in the latest indication the economy is cooling as transportation carriers head into the annual peak season for holiday imports.
The Commerce Department said consumer spending decreased 0.2 percent in June, compared with an 0.1 percent increase in May. Personal incomes inched up 0.1 percent while wages and salaries declined slightly. The savings rate rose to 5.4 percent in June, highest in nearly a year and up from May's rate of 5 percent.
Consumer spending accounts for 70 percent of U.S. economic activity and is a leading driver of containerized imports and intermodal traffic. The National Retail Federation’s monthly Global Port Tracker has forecast imports will be flat through August before rising by double digits during the peak season for holiday imports.
The Commerce Department report was “another dismal report on the consumer side of the economy,” Chris G. Christoper Jr., senior principal economist at IHS Global Insight, said in a research note.
He said consumers’ mood “is at depressed levels and those households that are not living paycheck-to-paycheck are saving more. This is considerably worrisome, since we are a consumer-oriented economy.”
“The only not-so-bad news in this report is that food prices are not increasing as fast,” Christopher said. But he noted that gasoline prices inched up again last month and that the employment outlook remains bleak, with a 9.2 percent jobless rate.
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