Figures released by the U.S. government in Washington revealed U.S. consumer spending increased for a fourth straight month in July amid strong demand for automobiles, pointing to a pickup in economic growth that could allow the Federal Reserve to raise interest rates this year.
The Commerce Department said Monday that consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.3% last month after an upwardly revised 0.5% gain in June.
July’s increase was in line with economists’ expectations. Spending was previously reported to have risen 0.4% in June. When adjusted for inflation, consumer spending also gained 0.3% in July after advancing 0.4%in June.
Consumer spending appears to have retained some of its momentum from the second quarter, when it grew at a 4.4% annual rate, the fastest in nearly two years. That jump helped to mitigate some of the impact of a sharp inventory drop and prolonged business investment downturn.
The economy grew at a lacklustre 1.1% growth rate in the second quarter.
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