Consumer spending takes unexpected dip

Consumer spending took a dip last month, against the expectations of most analysts.

{mosads}The Commerce Department said Friday that people spent 0.1 percent less in July — the first decline in six months — after a revised gain of 0.4 percent for June. Economists had expected a more modest rise in consumer spending in July, around 0.2 percent.

The drop in consumer spending, which accounts for more than two-thirds of economic activity, came after the Conference Board found a seven-year high in consumer confidence this week.

But the Conference Board and other groups tracking consumer sentiment have found most of the optimism is more about long-term trends, and wage growth remains somewhat stagnant. The University of Michigan reported Friday that confidence was highest among the wealthiest as well.

The Commerce Department also said Friday that personal income rose 0.2 percent in July, less than the 0.5 percent increase in June.