Consumer spending in the U.S. increased during August. The increase was the highest in six months, as people paid more due to higher fuel prices. A Friday report released by the government pointed to lackluster growth in the economy during the third quarter.
The Department of Commerce said that spending by consumers jumped 0.5% after an increase of 0.4% during July. Economists expected the increase in August.
Spending by consumers accounts for nearly 70% of the economic activity in the U.S. and the increase for the second consecutive month mostly was a reflection of higher prices of gasoline, which increased by an average of 28 cents a gallon in August. Purchases in new automobiles also helped to increase consumer spending last month.
The latest figures suggest that growth in spending by consumers will not likely improve significantly for the quarter from the 1.5% annual pace that was recorded for the second quarter between April and June.
Consumer spending at a slower pace and a decline in farm inventories because of the severe summer drought kept the gross national product growth at a pace of 1.3% during the second quarter, which was a decline from the first quarter of 2%.
With the prices of gasoline increasing, pressures from inflation increased in August. However, the preferred measure for inflation for the Federal Reserve increased just 0.1% in August.
