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Household Spending Rising07-08-15 | News
Household Spending Rising





The level of household spending shot up 0.9 percent in May on a month-to-month basis, news that could portend a strengthening economy in the second half of 2015.


Household spending shot up in May to its highest level thus far in 2015, according to a report released by the U.S. Commerce Department June 25.

The trend was driven in large pert because Americans are earning more and have additional disposable income to show for it, the report also suggests.

In a month-to-month analysis, the category of personal consumption expenditures increased nearly $106 billion, or 0.9 percent, in May. This compares to 0.1 percent in April; 0.6 percent in March; and 0.2 percent in February. In January, personal spending reversed course and contracted by 0.3 percent.

The upswing in household spending is directly tied to hikes in personal income and disposable personal income, both of which have also steadily risen through the first half of 2015.

Personal income rose $79 billion, or 0.5 percent, in May, again on a month-to-month basis. It increased by the same percentage in April. Personal income came in at a flat zero percent in March, representing a slowdown from the 0.4 percent gain in February. Personal income rose 0.3 percent in January.

Families had $65.5 billion, or 0.5 percent, more disposable income in May than April, according to the Commerce Department's data. This compares to a gain of 0.4 percent in April; 0.0 percent in March; 0.4 percent in February; and 0.2 percent in January.




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