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Business News

US consumer spending beats forecast for July

Spending by American consumers rose in July at its fastest rate for four months, the US Commerce Department said.

Against a background of increasingly gloomy economic predictions – not least the Federal Reserve chairman Ben Bernanke's warning on Friday that the outlook was "inherently uncertain" – last month's figures showed consumer spending rose by an unexpected 0.4 per cent despite personal income growing by only 0.2 per cent.

The positive report was a rare boost amid growing fears of a double-dip recession. Mr Bernanke warned last week that the American economy remained "vulnerable" after the country's second-quarter GDP growth was revised downwards to 1.6 per cent from 3.7 per cent over the previous three months.