consumer spending in May is nevertheless enough to keep the economy on track for a rebound in the second quarter, helped by income gains, Commerce Department figures showed Friday.
Americans may be reluctant to ramp up spending until they see a faster pickup in wages, even as steady hiring, healthier balance sheets and low borrowing costs are helping to support their purchases.
Since household spending accounts for about 70 percent of the economy, any persistent weakness would damp the outlook for a stronger rebound in economic growth after the lackluster pace of early 2017.
Wages and salaries, meanwhile, cooled to a 0.1 percent increase following a 0.5 percent gain in April.
If they fail to pick up the pace in coming months, Federal Reserve policy makers could reconsider plans to raise interest rates later this year while they’re waiting for inflation to reach their 2 percent goal.