|
|
Consumer spending rose 1.0 percent in June compared to May, the U.S. commerce department reported, while inflation ran to 9.1 percent.
Shoppers increased the dollar value of their purchases of furniture, gasoline, and groceries. Spending at restaurants also went up.
The figures are not adjusted for inflation. Therefore, consumers actually bought a smaller volume of “stuff” in June, even though they spent more to buy it.
General Mills, purveyor of breakfast cereals and dessert mixes, reported higher sales in terms of dollar value in its most recent fiscal quarter, but that it sold fewer individual items across all product categories.
Americans spent 3.6 percent more on gasoline in June, while gas prices rose 11 percent from May, indicating that consumers are driving less to save fuel costs, The Wall Street Journal said.
A commerce department report due later this month will report May spending on services, which is estimated to have grown by 0.2 percent that month, compared to a 1.9-percent post-COVID expansion last January.
Consumers maintained their gloomy view of the economy, according to the University of Michigan’s monthly survey of consumer sentiment. Consumer sentiment of current economic conditions registered 51.1 on a scale of 100, barely rising from June’s record-low 50.0.
Home construction also slowed in June and factory production fell for the second month in a row.
TRENDPOST: When inflation is galloping above 9 percent and consumer spending rises by a fraction, obviously consumers are buying fewer goods and less services. Because sales figures are reported as dollar volumes and not adjusted for inflation, those figures have to be compared to the current inflation rate to reveal the real levels of consumer spending.
TREND FORECAST: Consumer spending will continue to trend down in real terms until consumers see inflation’s rate decreasing over at least three months.
That trend, whenever it happens, will not build consumer confidence, since their rising wages are far below the real inflation rate, which according to John Williams Shadowstats, is double the “official” government rate.