In June, Families Made the Same, Saved More, Spent Less
Data released by the Bureau of Economic Analysis at the Commerce Department this morning shows that Americans earned a bit more, spent a bit less and saved more in June — all in line with economists’ expectations. Consumer spending drives about 60 percent of the economy, therefore, economists do not expect the recovery to take strong hold until American families feel secure enough and are earning enough to spend again. Unemployment, of course, remains a major drag on the economy.
Wages and salaries fell $5.2 billion in June, after increasing $19.2 billion in May. Overall income increased $3 billion, less than 0.1 percent, between May and June. Consumer spending decreased $2.9 billion between May and June. And Americans saved $726 billion, 6.4 percent of disposable income, up from $714 billion in May. Overall, all of these key indicators of macroeconomic health point to a continued slowdown, or even a stall-out, in the recovery.
The core consumption expenditures index, an indicator of inflation excluding volatile food and energy prices, increased less than 0.1 percent.