Report says Americans, LIers included, cut spending
Americans cut back on spending in June for the first time in almost two years as their incomes grew by the smallest amount in nine months.
The monthly spending and income report from the Commerce Department was another troubling sign that the economy has slowed to a crawl, and it rattled the stock and commodities markets. The Dow Jones industrial average Tuesday was down 265.11 points to close at 11,866.62.
“It's dismal,“ said economist Ken Goldstein, of the Manhattan-based Conference Board, a business information provider for member companies. “We've got a consumer who is in a funk and that is not going to change until job growth begins to pick up, and we are, at a minimum, a couple of months away from that, and very possibly a lot more than that.“
The department's Bureau of Economic Analysis said consumer spending dropped 0.2 percent in June from May. Some of the decline was caused by falling food and energy prices. Excluding spending on those items, consumer spending was flat. Incomes rose by a tenth of a percent, the smallest gain since September.
Economist Pearl Kamer of the Long Island Association, a business group, said: “The recovery from the recession has stumbled and has been extremely anemic, and prospects for a double-dip recession have increased. The recovery is now 2 years old and we haven't seen much job growth, and consumers are responding to that by buying only what they absolutely need.“
“I look for things on sale and that's how I make decisions,“ Agatha Zakrzewski, 45, of Melville, said outside the supermarket. “I try to plan more than I used to in terms of what I'm going to buy.“
Edward Gullason, a professor of economics at Dowling College in Oakdale, said that settlement of the debt-ceiling crisis might improve consumers' mood somewhat, but that the fundamental problem of high debt hasn't been resolved. “We haven't tackled the real hard issues yet,“ he said.