Economic Update!
Personal income growth slowed sharply in May, rising a slight 0.2%, far below April’s increase of 0.6%, the Commerce Department reported June 30. It was the weakest showing since a decline of 2.5% in January. The slowdown was attributed to the weak increase in jobs last month.
Meanwhile, consumer spending, which accounts for two-thirds of total economic activity, was unchanged in May after having risen 0.6% in April. Analysts blamed unusually cold weather for May’s flat performance.
Economic growth in the first quarter, however, was revised upward from 3.5% to 3.8%, the Commerce Department said June 29, signaling that the country’s economic expansion remains on firm footing. Stronger spending on housing projects and more investment by business in equipment and software played a key role in the higher growth estimate.
Despite record-low mortgage rates, applications for U.S. home mortgages fell for the second consecutive week, the Mortgage Bankers Association said June 29. The MBA’s seasonally-adjusted index of mortgage application activity fell 1.1% to 778.4, adding to the previous week’s 11.3% loss.
Next week, look for updates on Wholesale Inventories and Consumer Credit on July 8.
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