Jul 31, 2023 - Economy

Personal spending kept climbing in June

Data: Bureau of Economic Analysis via FRED; Chart: Axios Visuals

More evidence that the American consumer is in pretty good shape arrived on Friday.

Driving the news: Real personal spending— that is, adjusted for inflation — hit another new high in June.

Why it matters: All eyes are on the collective consumer as we watch for any signs that the Fed’s rapid succession of rate hikes might tip the economy into recession.

  • If people are worried about losing their jobs, they tend to be a little more cautious about their spending. That's not what's happening now — consumers are propelling the economy forward.

By the numbers: Real spending in June grew 0.4% compared with May, a higher growth rate than in each of the previous four months.

  • What we're watching: Any number of forces could slow consumer spending over the back half of the year — including the resumption of student loan payments and the continued shrinking of Americans' savings buffer, according to EY senior economist Lydia Boussour.

Meanwhile: Friday's data also showed the Fed's go-to measure of inflation cooling further.

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