Consumers spent more in May than in April, thanks in part to a rise in average income and low prices.
The latest report from the Commerce Department, which tracks consumer spending on a month-to-month basis, found that Americans spent 0.2 percent more than they did last month after holding steady between March and April. Incomes rose 0.4 percent in May, down slightly from the increase in 0.5 percent increase in April.
The national savings rate improved to 4.0 percent last month as well, up from 3.8 percent, as Americans put away $454.3 billion, the report said. The report also said that the country’s gross domestic product increased an annualized 2.7 percent in the first quarter partly as a result of the increased spending.
A report in the Wall Street Journal said that household spending and company investments need to pick up the slack from fading government stimulus money if the U.S. economy will continue to grow. Consumer purchases account for more than two-thirds of demand in the economy, but are being constrained by both a continued high unemployment rate and heavy debt.