In this June 14, 2019, photo a pair of shoppers, center, in the Levi's store in New York's Times Square, survey a T-shirt display. On Friday, Aug. 30, the Commerce Department issues its July report on consumer spending, which accounts for roughly 70 percent of U.S. economic activity. (AP Photo/Richard Drew)

Optimistic US consumers boost spending 0.6% in July

August 30, 2019 - 8:40 am

WASHINGTON (AP) — U.S. consumer spending grew 0.6% in July, a healthy gain that suggests American shoppers are driving the economy forward.

The Commerce Department also said Friday that personal incomes rose just 0.1%, the smallest gain in 10 months. With spending ahead of incomes, the savings rate fell to 7.7%, the lowest since last November.

With trade war tensions discouraging business investment and cutting into exports, consumers are increasingly important to the U.S. economy. Household spending was the principal driver of growth in the April-June quarter, when it increased by the most in five years.

An inflation measure in the report increased 0.2% in July and 1.4% from a year earlier, evidence that inflation remains mild. Excluding food and energy, core prices rose 0.2% in July and 1.6% from a year ago.

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