Americans made 0.4 percent more money in July than in June, took home 0.2 percent more after taxes and spent 1.9 percent more, according to a preliminary report issued on Friday (Aug. 28) by the federal Bureau of Economic Analysis. The slight increase in personal income follows declines in four of the last five months.
Today’s report states: “The increase in personal income in July was more than accounted for by compensation of employees as portions of the economy continued to reopen. Proprietors’ income and rental income of persons also contributed to the increase.”
The report continues: “Partially offsetting these increases were decreases in government social benefits and income on assets. Unemployment insurance benefits, based primarily on unemployment claims data from the Department of Labor’s Employment and Training Administration, decreased in July. The increase in spending was driven by purchases of new cars and trucks and expenditures for health care, “food services” and lodging, the report states.
Americans also saved less in July than in April, May or June, according to supporting tables the Bureau of Economic Analysis provided with Friday’s report. July savings were 7 percent below June’s and 28 percent below May’s.
The report also shows a decline of about 7 percent in unemployment benefits. Today’s report is based on economic activity through July 31, which coincides with the end of the $600 weekly federal boost to unemployment benefits.
Some experts have warned that a significant number of Americans will struggle financially without the added boost – and that evidence of a drop in spending on groceries only buttresses the argument that trouble looms for many families looms.
The CEOs of two of the country’s largest retailers, Walmart and Target, also recently sounded warnings about the ability of families to spend on necessities.
Meanwhile, recent data from The Conference Board indicates that the confidence of the typical American in the economy as measured by a snapshot in August declined for the second month in a row.