Newspaper article THE JOURNAL RECORD

Consumer Spending Jumps; Personal Incomes Increase

Newspaper article THE JOURNAL RECORD

Consumer Spending Jumps; Personal Incomes Increase

Article excerpt

WASHINGTON (AP) _ Consumers, the driving force behind any economic recovery, boosted their spending by 1.1 percent in May, the government said Thursday in a report seen as the surest sign yet the recession was ending.

"Unless something that we haven't forecast happens, it does look like the recession _ on a national basis _ has ended," proclaimed Michael Boskin, chairman of the White House Council of Economic Advisers.

The Commerce Department also said personal incomes rose 0.5 percent.

And the Labor Department reported the number of Americans filing new unemployment claims in mid-June turned down, pointing to further income improvement.

Boskin said the statistics were the latest in a series of reports providing "evidence that things which had been declining have now started back up again ... It certainly looks like this is the early stages of an economic recovery."

Private economists agreed.

"This is normal, early recovery behavior on the part of the consumer," said economist Robert G. Dederick of the Northern Trust Co. in Chicago. "I'd say the parts are falling into place. The pieces of the puzzle ... continue to add up to recovery."

Analysts noted that personal consumption accounts for two-thirds of the nation's economic activity and said the increase means the nation's economy resumed growing in the second quarter.

Many of them projected April-June growth of as much as 1 percent in the gross national product at an annual rate, followed by even stronger gains in the third quarter.

But Boskin cautioned, "This is only the early stages ... The recovery will not occur at the same time and at the same pace in different parts of the country and different industries."

The Commerce Department said personal consumption increased to a seasonally adjusted annual rate of $3.81 trillion, up from $3.77 trillion in April. It more than wiped out a revised 0.4 percent decline the previous month, even worse than the 0.1 percent drop first reported.

At the same time, the report said personal incomes totaled $4. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.