US consumer spending up just 0.1 per cent despite income gain
WASHINGTON — Americans enjoyed a healthy increase in income last month but didn’t spend much of the gain.
The Commerce Department said Friday that personal income rose 0.4 per cent in May, up from a 0.3 increase in April. But consumer spending rose just 0.1 per cent last month after climbing 0.4 per cent in both March and April.
After-tax income rose 0.6 per cent, the biggest gain since December 2012. The gap between the May increase in income and the increase in spending drove the U.S. savings rate to 5.5 per cent, the highest since last September.
Economists monitor consumer spending closely because it accounts for about 70 per cent of U.S. economic activity. Despite the modest rise in May, analysts remain confident that consumers picked up their spending overall this quarter and will be eager to spend their savings and higher incomes this summer.