Personal income in May increased slightly, at 0.4%, and consumer spending also rose, but at an even slower rate of 0.2%, the U.S. Department of Commerce reported Monday, June 28.
In comparison, income in April increased 0.5% while spending stayed flat at less than 0.1%, according to the department’s Bureau of Economic Analysis release.
“There are general trends going on which are positive for the economy as a whole, but these numbers aren’t showing a dynamic upturn in growth led by the consumer,” said Steve Blitz, senior economist with New York-based Majestic Research.
The takeaway from the personal income and consumer spending numbers is that Americans who are employed may be earning higher wages, but they are still hesitant about spending their additional money as they pay off debt and try to recapture their pre-recession net worth levels.
Stocks rose slightly on the news and remained higher in mid-afternoon trading, with the Dow Jones industrial average about 26 points higher at 10,170.
Analysts’ consensus was for an even slower 0.1% rate of increase for consumer spending compared to the 0.2% rate reported by the Commerce Department.