The personal income of American grew slowly in June, but spending increased far faster, the Commerce Department reported yesterday.
Separately, the government reported that manufacturers' shipments and new orders have been stronger this spring than reported earlier.
Personal income rose $14.5 billion, or 0.6 percent, to a seasonably adjusted annual total of $2.382 trillion. It was the same rate of increase as April and May and the fourth consecutive month of little or no increase in income after adjustment for inflation.
The monthly expansion of 0.6 percent was behind the 0.7 percent rise in May of consumer prices and may well be behind the June price rise, to be reported by the Labor Department on Thursday.
Despite the slow rise in personal income, American's stepped up their purchases in June considerably, by 0.9 percent, after two months of very little increase. May's personal spending was up only 0.2 percent after revision and April's declined by 0.1 percent.
Personal consumption expenditures increased $1.68 billion in June, compared with an increase of only $3.8 billion in May. Durable goods purchases, one of the bedrocks of the economy, declined $1.6 billion.
Purchases of nondurable goods took off during the month, up $8.4 billion caompared with a decline of $4.4 billion the month before. Purchases of services were at about the same place as May, increasing $10 billion compared with $10.5 billion.
The increased spending was at the expense of saving, however. Americans saved an estimated $6.8 billion less in June than in May and almost $19 billion less than in April .