Business

US consumer spending up 0.4% in July

US shoppers in Manhattan
Image caption The US economy is a hot topic in the forthcoming US presidential election.

US shoppers spent a little more in July compared with June, according to the US Commerce Department, raising hopes that the country's economy is continuing to recover.

Consumer spending rose 0.4% in July, the largest increase for five months and following no change in June.

The measure is closely-watched as consumer spending accounts for about 70% of US economic activity.

Other figures also showed US citizens earned 0.3% more after tax in July.

On Wednesday, figures showed that the US economy grew at an annualised pace of 1.7% in the April-to-June period.

But economists are warning that the economy will have to grow much faster if unemployment - currently at 8.3% for July - is to stop rising.

The US Federal Reserve has kept base interest rates at close to zero for nearly four years and pumped $2.3 trillion into the economy.

But speculation is growing that further stimulus measures will be introduced when policymakers meet on 12-13 September.

Fed chairman Ben Bernanke is due to speak at a conference in Jackson Hole, Wyoming on Friday, and commentators will be scanning his comments closely for clues to future policy.

Related Internet links

The BBC is not responsible for the content of external Internet sites