Consumer spending cooled in July as income growth slowed, indicating the world's largest economy was off to a slow start in the third quarter.
Purchases rose 0.1 percent after a 0.6 percent June gain that was larger than previously estimated, according to Commerce Department data issued today in Washington. Other reports showed business activity picked up this month and consumer sentiment declined less than projected from July's six-year high.
Gains in incomes are barely keeping pace with inflation, a sign employment will need to pick up for the expansion to strengthen. At the same time, rising home values are helping bolster household purchases of appliances and automobiles even in the face of rising mortgage rates, prompting Ford Motor Co. (F) to project sales this month will be the strongest since 2007.