U.S. consumer spending up for a fourth straight month in July, pointing to a pickup in economic growth that could pave the way for the Federal Reserve to hike rates this year. Bobbi Rebell reports.
Another sign of an improving economy raising the prospect of a Federal Reserve rate hike. Consumer spending up for the fourth month in a row driven by demand for autos. The Commerce Department saying the number rose 0.3 percent last month, after a half percent gain in June. Consumer spending accounts for more than two-thirds of U.S. economic activity. But this is just one data points, cautions Andrew Husby, economist at Decision Economics (SOUNDBITE) ANDREW HUSBY, ECONOMIST & STRATEGIST, DECISION ECONOMICS (ENGLISH) SAYING: "We're still penciling in at lease one hike this year, more likely December. The issue for the Fed is, obviously, there are a lot of conflicting data points. Strong consumer, but weak international. Strong prices in some areas, depending on which issue you'd like to look at, and weak prices elsewhere, and weak inflation expectations, which is a big deal for them." In addition to autos, consumer spending is also increasing because of the improving job market. As competition for workers increases, employers are feeling more pressure to pay employees more. Add to that a rising stock market and higher home prices, which put more money in consumers pockets.