WORLD> America
US consumer spending rises 0.8 percent in May
(Xinhua)
Updated: 2008-06-27 23:30

WASHINGTON  -- US consumer spending nudged up 0.8 percent in May, the biggest gain since 1.0 percent in November, the Commerce Department reported Friday.

Personal income, the fuel for future spending, climbed by 1.9 percent in May, the largest gain since 3.2 percent in September 2005.

Americans' disposable personal income, or after-tax income, surged by 5.7 percent last month. It was the biggest increase since May 1975, fed by the round of income-tax rebate payments made last month.

The personal saving rate, personal saving as a percentage of disposable personal income, was 5.0 percent in May, the largest since March 1995.

Consumer spending accounts for two thirds of overall economic activity and is a major force pushing economic growth.

The report came as government data showed that the economy grew at an annual rate of 1.0 percent in the first three months of this year, up from a 0.6 percent pace in the final quarter of 2007.

Consumer spending rose at an annual rate of 1.1 percent in the first quarter, down from a 2.3 percent growth rate in the previous quarter.

The gains in consumer spending and personal incomes last month were in line with expectations. Some analysts believe that spending could falter further in coming months as the economy is struggling through a persistent housing slump and a credit crunch.