At the time when the Federal Reserve is contemplating on whether or not it would cut back on its bond-buying program, there was an ever so slight rise in US consumer spending and a tame inflation performance.
More than two thirds of US economic activity is focused on spending and this activity has struggled to regain momentum as other factors indicate a further drop in consumer sentiment this August.
According to RBS Chief Economist Michelle Girard, "There has been a lot of optimism about the economy accelerating in the second half of the year as the fiscal drag waned. The latest data suggest that's not happening."
Consumer spending, according to the Commerce Department, increased by 0.1% and this was restrained with weak spending on utilities and cars. When these figures were adjusted for inflation, spending would be considered as flat.
In a separate report from the Thomson Reuters/University of Michigan's, the numbers would not be likely to increase anytime soon. The consumer index fell from 85.1 in July to 82.1 in August.
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