Americans Earned More, Spent Less In June

By Nish Amarnath | July 31 2012 11:28 AM

Despite U.S. incomes rising at the end of the second quarter, American consumer spending fell in June by 0.1 percent from the month before, the Commerce Department said on Tuesday.

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Commerce said incomes rose 0.5 percent in June but spending fell for the second straight month.

The figures suggest that in the third quarter U.S. consumer spending -- which accounts for about 70 percent of the nation's economic activity -- will be modest at best.

"Even if real spending rebounded by 0.2 percent month-on-month in each month of the third quarter, annualized real consumption growth in that quarter would still be 1.4 percent. If it rose by 0.1 percent month-on-month each month, it would be only 0.6 percent," Paul Dale, an analyst at Capital Economics, said in a report on Tuesday.

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