Americans spent in May at the weakest pace in 20 months, a sign that high gas prices and unemployment are holding back the economy. Consumer spending was unchanged, the worst result since September 2009, the Commerce Department said today. When adjusted for inflation, spending actually dropped 0.1%—the first decline in inflation-adjusted spending since January 2010.
"It was a very poor report all around," said a Bank of America economist. "I think it's clear that higher gasoline prices are taking a bite out of consumer spending." Wall Street, however, took the report in stride. Investors seemed more focused on encouraging news on Europe's debt crisis—French banks agreed to let Greece repay some of its debt more slowly.