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Consumer Spending Up in U.S., Q2 Wage Growth Slows
The U.S. Commerce Department reported consumer spending rose 0.4% in June, and the data for May was revised up, as consumer spending advanced 0.5% – it was previously reported at a 0.2% gain. That positive data was reflected in GDP growth, too, which grew at a 4.1% rate in Q2, nearly double of the 2.2% pace recorded in January through March.
While that’s the strongest performance in nearly four years, and sets up a solid outlook for the balance of the year, one perplexing part of the economic picture remains. Wage growth has yet to achieve any meaningful gains.
Personal incomes rose 0.4% in June, matching May’s increase. The Labor Department’s Employment Cost Index (ECI), which measures labor costs, rose 0.6%, pushing the ECI’s annual increase to 2.8%, its biggest gain since the Q3 2008. Still, wages and salaries rose just 0.5% in the second quarter, retreating from a 0.9% surge in the January to March period.
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- ◦Economy
