Spending up in June, increased job losses in JulyPosted on
Consumer spending increased 0.6 percent in June, even though disposable income fell 1.9 percent. Meanwhile, the unemployment rate climbed to 5.7 percent in July.
Personal consumption expenditures increased $57.1 billion in June, according to a report released today by the U.S. Department of Commerce. This compares to a 0.8 percent increase in May.
Personal income increased $6.8 billion, or 0.1 percent, and disposable personal income decreased $210.3 billion, or 1.9 percent, in June. In May, personal income rose $219.3 billion, or 1.8 percent, and DPI increased $595.4 billion, or 5.7 percent.
In April, May, and June, changes in disposable personal income were affected by the Economic Stimulus Act of 2008. The federal government issued rebate payments of $1.9 billion in April, $48.1 billion in May, and $27.9 billion in June. These rebates increased government social benefit payments and reduced personal taxes.
Excluding these rebate payments, DPI increased $32.4 billion, or 0.3 percent, in June, after increasing $41.7 billion, or 0.4 percent, in May.
On Friday, the U.S. Department of Labor reported a 0.2 percent rise in the unemployment rate for July, with 51,000 jobs lost last month. Thus far in 2008, payroll employment has fallen by 463,000. During the last 12 months, the number of unemployed persons has increased by 1.6 million, and the unemployment rate has risen by 1 percent.
Employment continued to fall in construction, manufacturing and several service-providing industries, while health care and mining continued to add jobs. Manufacturing employment fell by 35,000 in July, bringing losses over the last 12 months to 383,000.