Published: Tuesday, 31 Jul 2012 | 8:42 AM ET
NEW YORK, July 31 (Reuters) – Spending by American consumers fell in June for the first time in nearly a year when accounting for inflation, suggesting the economy lost momentum as it ended the second quarter.
MATTHEW LIFSON, SENIOR TRADER AND ANALYST, CAMBRIDGE MERCANTILE GROUP, PRINCETON, NEW JERSEY
“The fact that personal income rose is good, but the more important question is what are they doing with that income? Are they spending it or are they saving it? They’re more likely saving it because the personal saving rate rose and spending was flat. So that means consumers are afraid. Overall, this data suggests that the U.S. economy is stagnant overall and it’s just muddling through.”
DAVID SLOAN, SENIOR ECONOMIST, 4CAST LTD, NEW YORK
“These numbers are not terribly exciting. We had seen weakness in retail sales. The fact that income is running ahead of consumption is not that much of a surprise. Spending will improve somewhat in the second half of the year with income improving. This shows the U.S. economy is growing slowly.”
ADAM SARHAN, CHIEF EXECUTIVE OF SARHAN CAPITAL IN NEW YORK
“This is just the latest in a series of lackluster data we’ve seen over the past several months. It doesn’t tip the hand of the market, the Fed or the economy one way or the other. None of this data hits anything out of the park. The market is just yawning at them ahead of the Fed meeting.”
GARY THAYER, CHIEF MACRO STRATEGIST, WELLS FARGO ADVISORS, ST. LOUIS, MISSOURI
“We’re seeing some decent income growth but consumers are spending cautiously. There’s still a lot of uncertainty about the job situation. A lot of consumers are trying not to over extend themselves right now.”
STOCKS: U.S. stock index futures held onto their very slight earlier gains .
BONDS: U.S. Treasury debt prices maintained earlier gains .
FOREX: The dollar kept its earlier losses versus the euro .
(Americas Economics and Markets Desk; +1-646 223-6300)
Keywords: USA ECONOMY/PERSONALCONSUMPTION (INSTANT