U.S. News: Consumer Spending Rises Thanks to 'Cash for Clunkers' Boost
Consumer spending rose slightly in July as Americans swapped their old cars for new ones in a program meant to help steer the U.S. economy out of recession.</br></br>Spending rose 0.2% compared with June and personal income was unchanged, the Commerce Department said Friday. Inflation wasn't threatening, a price gauge showed.</br></br>The increase marked the third-straight month that spending climbed and reflected the effects of the federal "cash for clunkers" program, which let motorists swap gas-guzzlers for more fuel-efficient models. It began in late July and ended Monday.</br></br>Outside of the clunkers program, consumer spending was still weak, underlining the challenges to an economic recovery. About three-quarters of the spending increase came from outlays for new vehicles. Economists expect the program to register a similar effect for August.</br></br>"The economy did not come into [the third quarter] like a ball of fire," said Ken Mayland, who runs ClearView Economics.