Consumer spending increased by 0.5% in July compared to June and is up 5.3% from the previous year
The percentage of Americans who believe positively about the economy jumped to 34% in late August, up from 26% in early July, according to a Wall Street Journal poll of 1,500 people.
The University of Michigan’s consumer sentiment gauge has risen 2.3% since July. The Conference Board’s confidence index and Gallup’s economic confidence index also increased in August.
The reason
Lower gasoline prices, a decline in mortgage rates, and a strong stock market have improved consumer moods. Gas dropped to $3.31 per gallon, and housing mortgage rates fell to 6.35%.
However, the Commerce Department reported Friday that consumer prices, the Federal Reserve’s preferred inflation gauge, rose 2.5% in July from a year earlier.
But that didn’t stop people from spending more.
Consumer spending increased by 0.5% in July compared to June and is up 5.3% from the previous year. Spending is expected to remain strong in the third quarter.