Consumer spending rises in July, cutting into savings

The savings rate for U.S. households fell in July to the lowest level in three months as spending outpaced income, the Commerce Department estimated Monday.

The savings rate fell to 5.9% from 6.2% in June, which had been the highest level in a year. Consumer spending rose 0.4% in July while personal income increased 0.2%.

Federal Reserve Chairman Ben S. Bernanke singled out the higher savings rate as a key factor in slower-than-expected economic growth for the second quarter. Spending should pick up as consumers make headway in repairing their balance sheets, he said.

Read Full Article from Los Angeles Times

- Posted: 2010-08-30 21:23:41

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