Consumer spending rose more than expected this month, to its highest level in 6 years, after shoppers tightened their belts in June, Bloomberg reports. Consumer confidence jumped 7.3 points according to a Conference Board index, suggesting the slump was temporary. Economists chalk up the spending jump to low unemployment and the fact that incomes are growing faster than inflation.
Consumers haven't been deterred by high energy costs, last week's stock market rout, or the real estate crisis; they are enjoying a 0.3% rise in disposable incomeover the past month, and the savings rate has improved. But the ripples from the housing slump continue to spread, leading to decreased demand for home supplies and big-ticket items like cars.