U.S. consumer spending unexpectedly fell in July as savings rose to their highest level in more than 1-1/2 years, indicating that households remain cautious despite an acceleration in economic growth.
The Commerce Department said on Friday consumer spending dipped 0.1 percent last month, the first decline since January, after an unrevised 0.4 percent gain in June.
Economists had expected consumer spending, which accounts for more than two-thirds of U.S. economic activity, to increase 0.2 percent in July. When adjusted for inflation, it slipped 0.2 percent after gaining 0.2 percent in June.
The weakness in consumer spending at the start of the third quarter will probably do little to change perceptions that the economy has retained much of its second-quarter momentum.
Other sectors of the economy such as housing, business spending, exports and government activity are accelerating. In addition, labor market conditions are strengthening.
The dollar fell against a basket of currencies after the data. U.S. stock index futures were trading higher.
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