Consumer Spending and Incomes in U.S. Stagnate

Consumer spending, pending home sales and factory orders were all weaker than projected in June, showing the U.S. recovery lost momentum heading into the second half of the year as employment stagnates.

Household purchases, which account for about 70 percent of the economy, were unchanged from May, according to figures from the Commerce Department issued today in Washington. Contracts to buy existing houses unexpectedly dropped for a second month and factory bookings fell more than twice as much as economists estimated, other reports showed.

Stocks dropped, depressed by earnings at companies like Procter & Gamble Co. that showed some Americans are cutting spending on name brands as the jobless rate hovers near 10 percent. Slower growth means it will take even longer to regain the 8.4 million jobs lost during the worst economic slump since the 1930s. (more)