Consumer spending in the United States edged up in July, largely driven by the government’s car scrappage programme – the so called “cash-for-clunkers” scheme – which got people into showrooms to do more than just kick tyres.
Consumer spending rose 0.2 percent in July, following on from June’s 0.6 percent increase. Spending accounts for about two thirds of US economic activity. Analysts said the July rise in spending raises hopes consumption will recover in the third quarter. However a new consumer confidence survey was down to its lowest in four months because of worries over high unemployment. Reflecting the anaemic job market incomes during July were unchanged after falling 1.1 percent in June.