US consumer spending rises just 0.1% in August
American consumers boosted their spending by just 0.1% in August, the smallest gain in six months, even as their incomes rose at a solid pace. Personal income increased 0.4%, up from a small gain in the previous month, the Commerce Department said Friday.
Consumers are a key driver of the economy as businesses have cut their investment spending and exports have slipped. August’s modest gain suggests the economy may slow in the July-September quarter compared with the beginning of the year.
The small increase in consumer spending was below most economists’ forecasts, and spending in July was revised slightly lower. In addition, a separate Commerce Department report showed that orders for long-lasting manufactured goods , such as autos and appliances, rose just 0.2% in August. And a key category that measures business investment fell, a sign that companies remain reluctant to invest in new equipment or to expand.
Most economists say the reluctance stems from the uncertainty surrounding the trade war. President Donald Trump has threatened to impose tariffs on about $160 billion of consumer goods imports from China Dec. 15, though talks about the dispute are scheduled for next month.
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