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Consumer spending stagnant in June

Consumer spending remained unchanged from May to June despite a 0.5 percent increase in personal income during the month, a signal that more people are saving. 

The Commerce Department announced this morning that personal income rose by $61.8 billion in June, up from May’s revised estimate of a $39 billion increase. 

The increase in personal income was the biggest in three months, according to Reuters, and the savings rate is now at 4.4 percent. 

When consumer spending in June is adjusted for inflation, there was a 0.1 percent drop from the previous month, according to Bloomberg. This would be the first time consumer spending dropped since last August. 

Economists surveyed by Reuters predict that the unemployment rate for July, which will be announced on Friday, will stay at 8.2 percent.

The Commerce Department reports come as the Federal Reserve starts two days of meetings this morning where Chairman Ben Bernanke will look for signs of a weakening labor market to see if the economy needs to be stimulated again, according to Reuters.

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