Consumer spending increases 0.4% in August reflecting modest two-month gain
Consumers spent $41.3 billion in August, up from 0.4% from the previous month, according to data from the Bureau of Economic Analysis. The overall economy remains volatile. While state-level unemployment remains stagnant, jobless claims fell below analyst expectations rates, and the GDP growth slowed. But optimism in continued stabilization and an eventual recovery carry on. Barclays Capital suggested stronger GDP growth in the third quarter, and Federal Reserve chairman Ben Bernanke expects consumer spending to accelerate in the months ahead. Personal income did increase in August, up 0.5%, which translates to roughly $59 billion. In July, incomes increased 0.2% by comparison. Private-sector wages accelerated in August while government wages dropped. Private wages increased by $26.1 billion for the month, over the $25.7 billion boost in July. Government salaries, however decreased in August by $5.2 billion after an $800 million increase the month before. Savings increased, too, in August reaching $661.9 billion total for the month, up 1.8% from $650 billion the previous month. Write to Jon Prior.