Washington • Income rose 0.1 percent in July following a 0.3 percent June gain. Overall wages and salaries tumbled $21.8 billion from June a third of the decline came from forced furloughs of federal workers.
Consumers' spending drives roughly 70 percent of economic activity. The weak spending report led some economists to sound a more pessimistic note about economic growth in the current July-September quarter. It follows July data showing steep drops in orders for long-lasting manufactured goods and new-home sales.
"This is a disappointing report on a number of levels," said James Marple, senior economist at TD Economics. "Prospects for a pickup in economic growth in the third quarter hinge on a broad-based acceleration in spending by households and business to offset the ongoing drag from government. The data for the first month of the quarter are not following this script."