The Commerce Department announces an increase of 5.6%, a less sustained advance compared to May and lower than analysts’ expectations.
–
Household spending in the United States rose 5.6% in June compared to May, a slower pace than the previous month, while government aid was less, according to data from the Department of Commerce published Friday.
This increase is also slightly lower than the 5.9% expected by analysts.
In May, spending had risen sharply (+ 8.5%, revised up), households having taken out credit cards and wallets after several weeks of confinement.
Household incomes, for their part, fell by 1.1% last month, more than expected, the aid paid by the government having been less than in May, which undoubtedly helped to slow down consumer spending. .
As for consumer prices, they climbed 0.4%, according to the PCE index, in line with expectations.
Excluding volatile food and energy prices, so-called core inflation rose 0.2%.
“The outlook for household spending is uncertain, especially given the recent closures of businesses and restaurants due to the virus which are leading to further layoffs,” said Rubeela Farooqi of High Frequency Economics.
And the additional $ 600 weekly aid, which the federal government has been paying to the unemployed since April, ends Friday evening.
This “will be an additional shock to income,” she added.
Republican and Democrat elected officials are negotiating a new aid plan, but fail to find common ground. Particularly, Republicans want to cut additional aid to the millions of Americans who lost their jobs during this crisis.
Less support for household spending “will probably lead to a more moderate rebound in growth in the third quarter”, anticipates Rubeela Farooqi.
The world’s largest economy rebounded in May, thanks to the reopening of activity in several states. But the cases of Covid-19 started to rise sharply from the end of June, again causing economic activity to suffer.
–
