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News Summary: US consumer spending up in June

The Associated Press

FILE - In this Friday, June, 28, 2013, file photo, people shop at Pyro City retail store, in Winslow, Maine. The government reports how much consumers spent and earned in June on Friday, Aug. 2, 2013. (AP Photo/Robert F. Bukaty, File)

BIGGER SPENDERS: Consumers increased their spending by 0.5 percent in June, the fastest pace in four months. But income growth slowed to 0.3 percent after a 0.4 percent gain in May.

SAVING RATE SLIPS: The combination pushed the savings rate down slightly in June to 4.4 percent of after-tax income. It had been at 4.6 percent of after-tax income in May. The savings rate stood at 5.6 percent for all of 2012, indicating that consumers are trimming their savings to finance spending in the face of weak income growth.

THE OUTLOOK: The hope is that strong consumer spending will help boost a lackluster economy to faster growth in the second half of this year. But for that to happen, economists say income growth needs to accelerate.