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Consumer spending rises less than expected

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Consumer spending rises less than expected

Healthcare expenditures remain a drag on spending.

The Commerce Department reported today that consumer spending increased 0.2% in May.  This follows a decline of 0.1% in April.

Analysts had expected an increase of 0.4%.

Signs of inflation appeared again during May, with both the overall index and the index excluding food and energy increasing by 0.2%, both identical to April’s increases.  The overall index is up 1.6% from a year ago, while the index excluding food and energy is up 1.5% during that period.

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The less-than-expected increase in consumer spending suggests that Q2 GDP growth may be somewhat lower than many analysts have predicted, given that such spending constitutes about two thirds of overall GDP.

 

 

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