Consumer spending rise seen too weak a spark

WASHINGTON - Americans are spending a little more this summer, but hardly enough to rejuvenate the weakening economy.

What is needed is a bigger boost in salaries and more jobs. Economists don't see either coming this year, which is why the economy is likely to limp along.

Still, modest gains in spending were a welcome sign after a string of economic reports last week raised fears of the country slipping back into a recession.

"The consumer hasn't taken the economy back into recession," said Stuart Hoffman, chief economist at PNC Financial Services Group. "The consumer is still moving forward, but they are doing it at a very modest pace."

Consumer spending rose 0.4 percent last month, with much of the strength coming from increased demand for autos, the Commerce Department reported yesterday. It was the best showing since March, but it followed three months when spending was basically flat.

Americans did earn a little more in July after seeing their incomes unchanged in June. Still, the 0.2 percent increase was mostly the result of small wage and salary gains that fell far below increases seen in more robust economic recoveries, economists said. And some of the gains came from a jump in Social Security payments.

- AP