Consumer Spending Falls for First Time in Two Years

According to data from the U.S. Commerce Department Tuesday, consumer spending unexpectedly fell 0.2 percent in June, reversing a 0.1 percent gain in the prior month. This is the first drop in spending recorded in over two years.

Economists had forecast a rise of 0.1 percent for the month.

Consumers are clamping down as persistent unemployment and rising inflation are creating an unfavorable spending environment.

Personal income saw a 0.1 percent increase for June, slightly lower than the 0.2 percent increase forecast by economists. The number continues a move higher of 0.2 percent in May.

Core preferred price index numbers rose 0.1 percent from May, lighter than the 0.1 percent increase.

Weekly earnings adjusted for inflation dropped 0.9 percent in the 12 months ended June on average, according to figures from the Labor Department.

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