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.

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