Economy & Business

Consumer Spending Beats Expectations in June, Allaying Economic Fears

Shoppers ride escalators at the Beverly Center mall in Los Angeles, Calif., November 8, 2013. (David McNew/Retuers)

Consumer spending was robust in June, beating expectations after a disappointing first quarter stoked fears that the U.S. economy might be heading for a decline.

Retail sales increased 0.4 percent in June, surging past economists’ projections of a 0.1 percent increase, according to a Commerce Department report published Tuesday. Purchases of furniture, building materials, and motor vehicles, among other items, increased.

Market expectations that the Federal Reserve will cut interest rates remain unchanged despite the strong report and consumer-spending increases in April and May.

The buoyant numbers assuaged fears that the economy was heading into a downturn after a weak first quarter that included declining business investment and an inventory surplus among some companies. Consumer spending sank during the early months of the year in the aftermath of the record 35-day partial government shutdown that stretched from December through January.

The Congressional Budget Office estimated that the shutdown, which left about 800,000 federal workers without paychecks for five weeks, cost the U.S. economy $3 billion it will likely never recover.

Most Popular


The Age of Miscalculation

On August 7, 1998, more than 200 people were killed in terrorist attacks on U.S. embassies in Dar es Salaam, Tanzania, and Nairobi, Kenya. Americans learned three names most of them never had heard before: Ayman al-Zawahiri, Osama bin Laden, and al-Qaeda. On August 20, 1998, President Bill Clinton ordered a ... Read More

Jay-Z Joins the Ranks of the Insufficiently Woke

Rapper and mogul Jay-Z announced his company’s new partnership with the National Football League and has made much of the social-justice Left furious: I think that we forget that Colin [Kaepernick]’s whole thing was to bring attention to social injustice, correct? So, in that case, this is a success; this is ... Read More