August 13, 2011- Consumer spending increased in July, as people spent more on furniture, autos and gasoline that in any of the previous four months. This increase could mean that more Americans are getting more confident about the economy and less worried about a possible double-dip recession.
Retail sales increased .5% last month says a report from the Commerce Department making it their best increase since one in March that was .8% and sales in the prior two months were also adjusted upward by the government making it apparent that the economy was not as bad as previously expected.
Because consumer spending accounts for over 70% of the growth in the economy, it is closely watched by financial analysts and economists. Recent poor data and a very negative out look from the Federal Reserve this week caused the stock exchange to go through one of its most volatile weeks in years.
Retails sales do not include spending for services and have been on the decline since February. In June they increased only .1% and if you take out car sales, they were flat.
July sales were helped with specials on back to school items that were offered in many of the larger department stores. This bit of good news helped the stock market early Friday as stocks up over 100 points higher.