Consumer Spending Up Weak 0.1 Percent in July

WASHINGTON (AP) — U.S. consumers barely increased their spending in July after their income grew more slowly, held back by steep government spending cuts that reduced federal workers' salaries.

The Commerce Department says consumer spending rose just 0.1 percent in July from the previous month. That's slower than June's 0.6 percent increase.

Income rose a slight 0.1 percent in July following a 0.3 percent June gain. Government wages were reduced $7.7 billion in July at an annual rate, largely because of forced furloughs of government employees to meet the spending cuts.

The tepid July gains in spending and income suggest the economy started the July-September quarter growing at weak pace. Consumer spending drives roughly 70 percent of economic activity.

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